OJK Projects UMKM Credit Growth of 7-9 Per Cent in 2026

The Indonesian Financial Services Authority (OJK) has projected credit disbursements to the micro, small and medium-sized enterprise (UMKM) sector will grow 7-9 per cent in 2026, coinciding with strengthening consumer confidence and improved prospects for national economic growth.

Dian Ediana Rae, Executive Head of Banking Supervision at OJK, stated that despite a slowdown of 0.53 per cent in early 2026, the fundamentals of the sector remain sound.

“Although UMKM credit disbursements in January 2026 were recorded at IDR 1,482.9 trillion, approximately 17.33 per cent of total credit and financing disbursements, and experienced a year-on-year moderation of 0.53 per cent, the fundamentals of the UMKM sector remain protected,” she said in a written statement.

According to her, the moderation in UMKM credit growth in early 2026 was influenced by global and domestic economic dynamics. Additionally, the recovery process of the UMKM sector following the pandemic has been relatively slower compared to the corporate sector.

Despite the slowdown, OJK views the prospects for UMKM credit disbursement as positive. This is supported by rising consumer confidence and the potential for increased domestic economic activity.

OJK recorded the Consumer Confidence Index (IKK) in early 2026 at a positive level of 127.00 per cent, whilst the Consumer Price Index was recorded at 109.75 per cent. Both indicators show an upward trend over the past year, reflecting public optimism about current and future economic conditions.

Additionally, the momentum of Eid celebrations is expected to drive economic growth in the first quarter of 2026. These conditions are considered likely to strengthen the UMKM sector through increased household consumption, which will boost demand for working capital credit.