SME Credit Remains Under Pressure, OJK Highlights Purchasing Power and Market Access

JAKARTA — Credit distribution for micro, small, and medium enterprises (SMEs) continues to face pressure in early 2026. Amid credit contraction and a relatively high non-performing loan ratio, the Financial Services Authority (OJK) assesses that the issues facing this sector are not solely related to financing but also linked to weakening purchasing power, declining business interest, and market access challenges. OJK’s Executive Head of Banking Supervision, Dian Ediana Rae, revealed that SME credit contracted by 0.56% year-on-year in February 2026, while the share of SME credit to total bank credit stood at 17.35%. “In February 2026, SME credit contracted by -0.56% (yoy) and the share of SME credit to total credit was 17.35%. Furthermore, the NPL for SME credit was 4.68%,” Dian stated in a written statement, quoted on Wednesday (29/4/2026). According to her, the slowdown in SME credit reflects persistently weak credit demand from small business actors. This condition, Dian said, is influenced among others by a decline in public purchasing power and reduced interest in running businesses. Nevertheless, OJK observes that recent developments are beginning to show signs of improvement. “Although that is the case, looking at recent developments, there are signs of SME credit growth in a positive direction,” Dian stated. Amid the slowdown in credit distribution, OJK views the challenges faced by SMEs as inseparable from global dynamics and domestic conditions that affect business operations. “SME sector developments are not detached from the influence of global dynamics such as geopolitical conflicts, exchange rate fluctuations, energy prices, as well as national conditions like public purchasing power, interest rates, and market access, rather than the financial sector fundamentals,” she explained. This statement indicates that OJK sees the pressure on SME credit as largely triggered by real economic conditions rather than issues with the health of the financial sector. In the domestic context, the weakening of public purchasing power is one of the key focuses.