The government aims to boost bank lending to micro, small and medium enterprises (MSMEs) by raising the credit target from Rp 1.5 quadrillion (US$84.6 billion) to Rp 2 quadrillion in 2027, but doubts remain over whether the move will effectively address structural issues that have hindered lending to the sector.
A participant arranges bags made during a fashion training program on May 14, 2024, in Denpasar, Bali. Twenty people from micro, small and medium enterprises (MSMEs) took part in the event organized by the Denpasar city administration. (Antara/Nyoman Hendra Wibowo)
The government aims to boost bank lending to micro, small and medium enterprises (MSMEs) by raising the credit target from Rp 1.5 quadrillion (US$84.6 billion) to Rp 2 quadrillion in 2027, but doubts remain over whether the move will help, given the structural issues that have hindered lending to the sector.MSMEs Minister Maman Abdurrahman unveiled the plan on Aug. 21, saying there had been a request from the Office of the Coordinating Economy Minister to raise the credit target for MSMEs.
“It aims to improve access to bank loans for the MSME sector,” he said, as quoted by news agency Antara.
Outstanding bank credit totals around Rp 9 quadrillion, with some Rp 1.5 quadrillion of that allocated to the MSME sector, comprising Rp 300 trillion of subsidized microcredit program (KUR) and the remaining Rp 1.2 quadrillion in commercial loans.
