OJK Urges Banks to Finance MBG and Village Cooperatives: Risk Management Must Still Be Prioritised
JAKARTA, KOMPAS.com - The Financial Services Authority (OJK) assures that the push for banks to disburse credit, including for government programmes, remains guided by prudent principles to avoid triggering a surge in non-performing loans (NPLs).
OJK’s Executive Head of Banking Supervision, Dian Ediana Rae, stated that banks are indeed encouraged to play an active role in supporting the economy.
However, the primary function of banks as managers of public funds means that risk management aspects cannot be overlooked.
“Credit disbursement must still pay attention to risk management and good governance, in line with the role of banks as intermediary institutions,” Dian told Kompas.com on Monday (20/4/2026).
This regulation requires banks to have a clear internal system before granting loans.
Dian gave an example: simply put, banks cannot arbitrarily disburse credit.
There is a process that must be followed, starting from assessing the eligibility of prospective debtors, monitoring credit quality, to mechanisms for resolving problematic loans.
In assessing prospective debtors, Dian said, banks are required to conduct a comprehensive analysis known as the 5C principles: the borrower’s character, ability to pay, financial condition, collateral, and the general economic condition.
In addition, banks are also required to prepare reserve funds to anticipate potential bad debts, in accordance with applicable financial accounting standards.
Dian emphasised that the decision to grant credit remains entirely in the hands of the banks, considering each bank’s risk profile, business strategy, and liquidity condition.
On the supervision side, OJK is not idle.
The institution routinely monitors banking performance, both through financial reports (offsite) and direct on-site examinations. This supervision covers various aspects, from compliance with prudent principles, suitability of credit disbursement, to the adequacy of provisions held by the bank.
With this mechanism, OJK hopes that credit disbursement can continue to drive economic growth without sacrificing the stability of the banking sector.
Previously, the government and financial authorities have again encouraged the involvement of the national banking industry in supporting various national priority programmes.
Most recently, the Financial Services Authority (OJK) is preparing a Draft OJK Regulation (RPOJK) regarding adjustments to the Bank Business Plan (RBB).
OJK Commissioner Chairman Friderica Widyasari Dewi revealed that in the new regulation, OJK will design RBB provisions to further encourage banks to actively support government priority programmes such as the 3 million homes programme, Free Nutritious Meals (MBG), and Red White Village Cooperatives.
“We are designing the RPOJK for adjustments to the RBB provisions. Within it, how we support banks to be more involved in government priority programmes,” she said at the Bank Mega Tower, Jakarta, on Tuesday (7/6/2026).