SMEs to Lose Special Allocation Fund in 2026, Minister of Industry Intervenes
Government support for small and medium industry (IKM) centres through the Special Allocation Fund (DAK) has faced changes in recent years. After previously receiving allocations for several centres, the IKM programme will no longer be included in the 2026 DAK scheme.
The Minister of Industry, Agus Gumiwang Kartasasmita, stated that the DAK plays a vital role in driving the development of IKM centres in various regions. Previous programme evaluations also indicated improved performance among centres that received support.
“In the 2022 to 2024 period, the physical DAK managed by the Ministry of Industry was implemented as supporting industries for tourism themes. Support was provided to 8lar 83 IKM centres in 2022 with a ceiling of 753 billion rupiah, 68 IKM centres in 2023 with a ceiling of 450 billion, and 57 IKM centres in 2024 with a ceiling of 394 billion,” Agus said during a working meeting with Commission VII of the Indonesian House of Representatives (DPR RI) on Monday.
In 2025, the scheme began shifting towards industrial zone themes. Support was provided to three centres with a budget of Rp50 billion for various supporting infrastructure needs.
“In 2025, for the first time, the Ministry of Industry was entrusted to manage the industrial zone theme within the DAK programme. This includes three centres with a ceiling of 50 billion, supported by connectivity sectors such as roads, trade sectors such as markets, as well as water supply and sanitation sectors,” he added.
For 2027, the Ministry of Industry has re-proposed support for IKM centres within the themes of industrial zones and national food development zones. However, the available fiscal space for the DAK means that support for the industrial sector remains limited.
“For 2027, the Ministry of Industry’s proposals have been submitted to Bappenas under the industrial zone theme and the national food development zone (KPPN) theme, with the potential for 75 priority locations for IKM centres. This includes 15 centres in the industrial zone theme and 60 centres in the KPPN theme for agriculture and aquatic food,” said Agus.
Evaluation results serve as the reason why the Ministry of Industry continues to push for the sustainability of this programme. The performance of recipient centres shows that most are operational and IKM productivity has increased.
“Based on Krisna data available at Bappenas, the productivity of IKM in DAK recipient centres has increased by an average of almost 17%, exceeding the set target of 10%. This achievement serves as our basis that the sustainability of the IKM-sector DAK programme must remain a priority, by continuing to strengthen governance preparation and the sustainability of centre management,” Agus concluded.