UMKM Credit Remains Weak at the Start of 2026, OJK Urges Integration into Supply Chains
JAKARTA, KOMPAS.com — Credit distribution to the micro, small, and medium enterprise (UMKM) sector is still showing weak performance at the beginning of 2026.
This situation occurs amid strengthening banking credit growth and regulatory optimism regarding the future prospects of UMKM financing.
Bank Indonesia Governor Perry Warjiyo, during the March 2026 Bank Indonesia Board of Governors Meeting on Tuesday (17/3/2026), stated that banking credit growth continues to be strengthened to support economic growth.
Based on usage categories, this growth is supported by investment credit, working capital credit, and consumer credit, growing by 20.72 percent (yoy), 3.88 percent (yoy), and 6.34 percent (yoy), respectively.
The central bank estimates that credit growth throughout 2026 will remain in the range of 8 to 12 percent, influenced by both demand and supply factors.
From the demand side, the utilisation of bank financing is assessed as still able to be improved, particularly through the optimisation of undisbursed loan facilities amounting to Rp2,536.40 trillion, or equivalent to 22.86 percent of the total available credit ceiling.
Additionally, banks’ interest in credit distribution is still considered good, as reflected in relatively loose lending requirements.
However, this easing does not fully apply to the consumer credit and UMKM segments due to the still high credit risks in both segments.
To encourage credit distribution, Perry stated that his side will continue to strengthen bank funding capacity, including through the development of non-traditional funding instruments (non-DPK).
On the other hand, Director of the Digital Economy at the Center of Economic and Law Studies (Celios), Nailul Huda, assesses that the recovery of banking credit in general has not yet been fully followed by UMKM financing.
“This is a problem, how on the consumption side which is starting to improve, but on one side it turns out it hasn’t had time to grow credit from UMKM. Meanwhile, UMKM is the backbone of our economy. This is the question,” said Huda during a media briefing at RDTX Square, Jakarta, on Tuesday (11/3/2026).
According to him, the weakness in credit distribution to the UMKM sector needs to be addressed because this sector plays an important role in absorbing labour and maintaining domestic economic activity.