OJK says MSME development to take more systemic approach

The Financial Services Authority (OJK) is now implementing a more systematic and systemic approach to developing micro, small, and medium enterprises (MSMEs), according to a top official. One form of support provided by the OJK is the issuance of Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (P2SK), which aims to accelerate credit growth for MSMEs. Based on the National Medium-Term Development Plan (RPJMN), the target ratio of MSME credit to total banking credit by 2029 is 25 percent. Currently, total banking credit stands at Rp9,019 trillion, with Rp7,506 trillion or 83.3 percent allocated to non-MSMEs, while MSMEs receive only Rp1,513 trillion or 16.7 percent. Following the issuance of OJK Regulation Number 19 of 2025 on Ease of Access to Financing for MSMEs and the establishment of a new directorate within OJK handling MSME affairs, banking credit growth for MSMEs is expected to increase. OJK data shows MSME credit grew by 0.8 percent year-on-year (yoy) in May 2026, contributed by micro and medium enterprise credit growth of 0.64 percent and 1.84 percent respectively, although small enterprise credit contracted by 0.24 percent. The OJK hopes the formation of a working group through the UMKM Finance Summit 2026 will monitor and improve the quality of financing and the MSME ecosystem over time, in collaboration with agencies including the Ministry of Finance, the Coordinating Ministry for Economic Affairs, Bank Indonesia, and the Ministry of MSMEs.