OCDE - Financing SMEs and Entrepreneurs 2026 - Indonesia de 2026

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FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

Financing SMEs and entrepreneurs 2026: Indonesia

PUBE 1

FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

Key facts on SME financing Based on National Labour Force Survey (Sakernas), published by the Ministry of Micro, Small, and Medium Enterprises (MSMEs) of the Republic of Indonesia, the number of MSMEs reached 56,142,6 87 units in 2024, representing 99.90% of the total business population. MSMEs contributed 59.6 4% to the national Gross Domestic Produ ct (GDP) in 2024, underscoring their significant and strategic role in Indonesia’s economic development. Outstanding loans to MSMEs recorded a slight decline of 0.30% y-o-y in 2025, dec reasing from IDR 1,506.29 trillion in 2024 to IDR 1,501.73 trillion in 2025. Furthermore, the share of MSME loans in total outstanding loans has shown a declining trend over the past five years, falling f rom 22.02% in 2021 to 17.49% in 2025, with an average yearly share of approximately 20,06%. Over the last three years (2023 –2025), non-performing loans (NPLs) for total businesses have declined from 2.19% to 2.05%. In contrast, NPLs from MSMEs have increased from 3.71% to 4.33%.

Over the last three years (2023 –2025), non-performing loans (NPLs) for total businesses have declined from 2.19% to 2.05%. In contrast, NPLs from MSMEs have increased from 3.71% to 4.33%. Outstanding loans granted by finance companies to all businesses increased sl ightly by 0.61% in 2025. However, financing to MSMEs declined significantly by 17.64%, falling from IDR 180.48 trillion in 2024 to IDR 148.65 trillion in 2025. Consequently, the MSME share of total financing decr eased from 34.09% to 27.90%. The proportion of short-term MSME financing in total outstanding MSME financ ing by finance companies also declined sharply, from 16.23% in 2024 to 2.40% in 2025. Interest rates of loans provided by finance companies to MSMEs increased from 20.35% in 2024 to 20.53% in 2025. In contrast, the financing rates to large firms declined from 14.45% to 13.67%. Consequently, the interest rate spread widened from 5.90% to 6.87%. As an alternative source of MSME financing, apart from finance companies, venture capi tal companies can also play an important role in the growth and development of MSMEs. However, in Indonesia, venture and growth capital financing remained relatively stagnant over the past three years , with fluctuating amounts of IDR 17.03 trillion in 2023, IDR 16.48 trillion in 2024, then IDR 16.58 trillion in 2025, representing a decrease of 2.64% during those years. Other non-bank finance indicators recorded a modest decline in 2025 compared to 2023. Leasing and hire purchases contracted by 1.49% over the period, while factoring activities also exhibited a similar trend, declining by 3.16%. Access to finance remains a challenge for many SMEs in Indonesia. To address this issue, the Government

purchases contracted by 1.49% over the period, while factoring activities also exhibited a similar trend, declining by 3.16%. Access to finance remains a challenge for many SMEs in Indonesia. To address this issue, the Government of Indonesia continues to support SME financing through the People’s Business Credit Programme (Kredit Usaha Rakyat – KUR) and other financing schemes aimed at improving access to affordable credit and supporting SME growth. Indonesia2 

FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

Table 1. Scoreboard for Indonesia Indicator Unit 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Debt Outstanding business loans, MSMEs IDR trillion 110.1 127.0 127.4 389.0 476.8 551.5 637.3 733.0 792.1 952.2 1 059 1 168 1 262 1 240 1 394 1 349 1 457 1 506 1 502 Outstanding business loans, total IDR trillion 1 002 1 308 1 308 1 778 2 217 2 727 3 321 3 708 4 094 4 908 5 320 5 932 6 270 6 069 6 330 6 424 7 090 7 827 8 586 Share of MSME outstanding loans % of total outstanding business loans 10.99 9.71 10.20 21.86 21.46 20.19 19.15 19.74 19.32 19.40 19.90 19.68 20.12 20.43 22.02 21.00 20.55 19.24 17.49

Outstanding short-term loans, MSMEs IDR trillion .. .. .. 102.6 120.8 141.7 195.0 215.4 100.1 115.0 94.3 101.1 106.3 131.7 123.1 295.7 326 332.8 326.1 Outstanding long-term loans, MSMEs IDR trillion .. .. .. 286.1 354.9 408.7 440.9 516.5 623.8 729.0 901.0 1 038 1 120 1 084 1 179 1 053 1 131 1 173 1 175 Share of short-term MSME lending % of total MSME lending .. .. .. 26.40 25.39 25.74 30.67 29.43 13.83 13.63 9.47 8.88 8.67 8.96 9.45 28.1 28.8 28.4 27.7 Government guaranteed loans, MSMEs IDR trillion .. .. .. 17.23 29 34.23 40.9 40.3 22.75 94.4 96.71 123.8 139.9 198.5 282.2 365.5 260.1 282.4 ... Direct government loans, MSMEs IDR trillion .. 0.04 0.41 1.07 1.15 1.25 1.43 1.15 1.56 1.25 0.41 0.04 1.72 1.99 3.78 .. .. .. .. Non-performing loans, total % of all business loans 4.08 3.20 3.35 2.55 2.16 1.87 1.77 2.16 2.49 2.96 2.63 2.40 2.51 3.03 2.98 2.44 2.19 2.08 2.05

Non-performing loans, MSMEs % of all MSME loans 4.80 3.87 4.22 3.97 3.43 3.23 3.19 4.00 4.20 4.05 3.89 3.35 3.36 3.95 3.82 3.41 3.71 3.76 4.33 Interest rate, MSMEs % 16.30 16.79 16.60 14.89 14.53 13.99 14.14 14.54 13.99 13.59 13.06 12.69 12.57 10.69 10.34 10.11 10.97 10.76 10.52 Interest rate, large firms % 12 13 13 12.73 12.28 11.60 11.88 12.48 12.51 12.16 11.39 11.01 10.62 9.36 8.80 8.09 8.34 8.27 7.88 Interest rate spread % points 4.14 3.30 3.79 2.16 2.25 2.39 2.26 2.06 1.48 1.43 1.67 1.68 1.95 1.32 1.53 2.02 2.63 2.50 2.64 Non-bank finance Venture and growth capital IDR trillion .. .. .. .. .. 4.3 6.0 6.9 7.2 8.5 7.1 8.46 12.72 13.40 16.59 17.68 17.03 16.48 16.58 Venture and growth capital (growth rate) %, Year-on-year growth rate .. .. .. .. .. .. 38.70 14.68 4.38 17.69 -16.26 18.93 50.40 5.29 23.84 6.56 -3.69 -3.18 0.06

Leasing and hire purchases IDR trillion 36.5 50.7 46.5 53.7 76.6 105.1 117.4 111.0 105.4 97.7 104.8 112.2 106.9 92.64 89.91 46.25 49.37 48.23 48.63 Factoring and invoice discounting IDR trillion 2.2 2.2 2.0 2.3 3.9 5.1 7.7 9.4 10.7 11.5 13.3 15.48 16.17 12.28 10.74 2.55 4.27 5.20 4.14

Note: This table contains data from both bank and non-bank sources. Due to availability, post-2016 data includes non-bank data. Another table that includes only non-bank data can be found in the “Nonbank sources of SME financing” part of the full profile.

Sources: See Table 5 3

FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

SMEs in the national economy Based on data published by the Ministry of Micro, Small, and Medium Enterpri ses (MSMEs) of The Republic of Indonesia, there were 56.142.687 MSMEs in 2024, which made up 99.90% of the total business population. They contribute 59,64% to national GDP in 2024, demonstrating that MSMEs have an important and strategic role in the national economy. To respond to the challenges faced by MSMEs, the Indonesian government issued Govern ment Regulation (PP) Number 7 of 2021 concerning Ease, Protection, and Empowerment of Coo peratives and Micro, Small and Medium Enterprises. This is a derivative regulation of the Job Creation Law which was validated in 2020. This regulation is expected to provide wider opportunity for MSMEs to grow and develop. Table 2. Business establishment by firm size in Indonesia, 2021-2024

Micro, Small and Medium Enterprises. This is a derivative regulation of the Job Creation Law which was validated in 2020. This regulation is expected to provide wider opportunity for MSMEs to grow and develop. Table 2. Business establishment by firm size in Indonesia, 2021-2024 Scale 2021 2022 2023 2024 Micro-Enterprises 48.904.813 52.073.014 54.649.219 54.423.290 Small-Enterprises 906.281 902.621 969.909 956.154 Medium-Enterprises 690.300 695.095 821.295 763.243 Large Enterprises 54.877 46.119 51.856 58.708 Total MSMEs 50.501.394 53.670.730 56.440.423 56.142.687 Total MSMEs + Large Enterprises 50.556.271 53.716.849 56.492.279 56.201.395

Note: Based on Government Regulation (PP) Number 7 of 2021 for the classification criteria for micro, small, medium, and large enterprises in

Indonesia.

Source: Statistics Indonesia (Badan Pusat Statistik) SME lending Based on data reported by commercial banks to Indonesia Financial Services Authority (Otoritas Jasa Keuangan / OJK), outstanding loans to all businesses increased by 9.69% y ear-on-year (y-o-y) in 2025

(IDR 8,585.83 trillion), with 17.49% of this amount (IDR 1,501.73 trillion) was allocated to micro, small, and medium-sized enterprises (MSMEs). Over the past ten years (2016 –2025), outstanding loans have generally shown positive growth with an average annual growth rate of 7.85% total loans and 6.83% MSME loans. However, a contraction occurred in 2020, which is likely contributed by the COVID-19 pandemic.

Over the past ten years (2016 –2025), outstanding loans have generally shown positive growth with an average annual growth rate of 7.85% total loans and 6.83% MSME loans. However, a contraction occurred in 2020, which is likely contributed by the COVID-19 pandemic. Outstanding loans to MSMEs recorded a slight decline of 0.30% y-o-y in 2025, dec reasing from IDR 1,506.29 trillion in 2024 to IDR 1,501.73 trillion in 2025. Furthermore, the share of MSME loans in total outstanding loans has shown a declining trend over the past five years, falling f rom 22.02% in 2021 to 17.49% in 2025, with an average yearly share of approximately 20,06%. Over the last three years (2023 –2025), non-performing loans (NPLs) for total businesses have declined from 2.19% to 2.05%. In contrast, NPLs from MSMEs have increased from 3.71% to 4.33%. Credit conditions During the 2016 –2025 period, lending interest rates exhibited a downward trend. Interest rates declined by 3.07% for MSMEs (from 13.59% to 10.52%) and by 4.28% for large companies (from 12.16% to 7.88%).4 

FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

Despite the large decline in MSME interest rates, MSMEs continue to face higher borrowing costs compared to large companies. In 2025, interest rates for MSMEs stood at 10.52%, whi le those for large corporations were recorded at 7.88%, resulting in an interest rate spread of 2.64%. Ov er the past five years, the interest rate spread has averaged approximately 2.26%, widening from 1.53% in 2021. This

corporations were recorded at 7.88%, resulting in an interest rate spread of 2.64%. Ov er the past five years, the interest rate spread has averaged approximately 2.26%, widening from 1.53% in 2021. This spread shows an increasing trend, as it consistently remained below 2% during the 2016 –2020 period. MSME Financing by Non-Bank Financial Institutions Outstanding loans granted by finance companies to all businesses slightly i ncreased by 0.61% in 2025. However, financing to MSMEs declined significantly by 17.64%, falling from IDR 180.48 trillion in 2024 to IDR 148.65 trillion in 2025. Consequently, the MSME share of total financing als o declined, falling from 34.09% to 27.90%. The proportion of short-term MSME financing in total outstanding MSME financing by the finance companies declined markedly, decreasing from 16.23% in 2024 to 2.40% in 2025. The MSME NPL rate for finance companies increased to 2.83% in 2025, compared to 2. 32% in 2024, 2.40% in 2023, and 2.14% in 2022. Nevertheless, this rate remain ed lower than the MSME NPL rate observed in commercial banks. Interest rates of loans provided by finance companies to MSMEs increased from 20.35% in 2024 to 20.53% in 2025. In contrast, the financing rates to large firms declined from 14.45% to 13.67%. Consequently, the interest rate spread widened from 5.90% to 6.87%. As part of the financing provided by the finance companies, leasing and hire purchases incr eased slightly from IDR 48.23 trillion in 2024 to IDR 48.63 trillion in 2025. Meanwhile, financi ng for factoring and invoice discounting declined from IDR 5.20 trillion in 2024 to IDR 4.14 trillion in 2025.

from IDR 48.23 trillion in 2024 to IDR 48.63 trillion in 2025. Meanwhile, financi ng for factoring and invoice discounting declined from IDR 5.20 trillion in 2024 to IDR 4.14 trillion in 2025. As an alternative source of MSME financing, apart from finance companies, venture capi tal companies can also play a role. However, venture and growth capital financing remained relatively stagnant over the past three years, with fluctuating amounts of IDR 17.03 trillion in 2023, IDR 16.48 trillion in 2024, then IDR 16.58 trillion in 2025, representing a decrease of 2.64% during those years. Over this period, the average growth rate was recorded at -2.09%. Other non-bank finance indicators recorded a modest decline in 2025 compared to 2023. Leasing and hire purchases contracted by 1.49% over the period, while factoring activities also exhibited a similar trend, declining by 3.16%. Table 3. Trends in MSME Financing by Non-Bank Financial Institutions in Indonesia Indicator Unit 2022 2023 2024 2025 Finance Companies Outstanding business loans, MSMEs IDR trillion 149.08 174.87 180.48 148.65 Outstanding business loans, total IDR trillion 440.70 495.63 529.49 532.74 Share of MSME outstanding loans % of total outstanding business loans 33.83 35.28 34.09 27.90 Outstanding short-term loans, MSMEs IDR trillion 2.12 26.95 29.29 3.57 Outstanding long-term loans, MSMEs IDR trillion 146.97 147.91 151.19 145.08 Share of short-term MSME lending % of total MSME lending 1.42 15.41 16.23 2.40 Non-performing loans, total % of all business loans 2.39 2.49 2.71 2.46

Share of short-term MSME lending % of total MSME lending 1.42 15.41 16.23 2.40 Non-performing loans, total % of all business loans 2.39 2.49 2.71 2.46 Non-performing loans, MSMEs % of all MSME loans 2.14 2.40 2.32 2.83 Interest rate, MSMEs % 20.55 20.79 20.35 20.53 Interest rate, large firms % 14.77 15.93 14.45 13.67 Interest rate spread % points 5.78 4.87 5.90 6.87 Leasing and hire purchases, MSMEs IDR trillion 46.25 49.37 48.23 48.63 5

FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

Factoring and invoice discounting, MSMEs IDR trillion 2.55 4.27 5.20 4.14 Venture Capital Companies Venture and growth capital IDR trillion 17.68 17.03 16.48 16.58 Venture and growth capital (growth rate) %, Year-on-year growth rate 6.56 -3.69 -3.18 0.60 Government policy response The People’s Business Credit programme (Kredit Usaha Rakyat – KUR) is a government-supported financing scheme aimed at expanding access to credit for micro, small, and medium enterpri ses, which is channelled through financial institutions under a credit guarantee scheme. The KUR programme is intended to strengthen the capital capacity of businesses in support of policies to ac celerate the development of the real sector and empower MSMEs. The amount of KUR disbursement could contribute to increasing economic activity and productivity that would raise earnings and reduc e poverty. KUR programme was started in 2007 by giving subsidies on the guarantee fee for micro-financing debtors. This

development of the real sector and empower MSMEs. The amount of KUR disbursement could contribute to increasing economic activity and productivity that would raise earnings and reduc e poverty. KUR programme was started in 2007 by giving subsidies on the guarantee fee for micro-financing debtors. This kind of subsidy policy lasted for 7 (seven) years and was replaced with a measure that consisted of giving subsidies on the difference in the interest rate from the market until now, so the debtors only pay a 6 % interest rate. The KUR programme consists of several schemes that differ according to the amount of fi nancing and its purposes: there are KUR Super Micro (KUR Super Mikro), KUR Micro (KUR Mik ro), KUR Small (KUR Kecil), KUR Cluster (KUR Klaster) and KUR for Migrant workers. KUR Super Micro i s intended for ultramicro entrepreneurs and new business actors, including productive housewives and work ers affected by layoffs during the COVID-19 pandemic. This scheme also supports businesses t hat have been operating for less than six months. KUR Micro supports micro enterprises seeking to expand thei r operations, while KUR Kecil is aimed at more established small businesses with larger financing needs. Special KUR (KUR Khusus) focuses on MSMEs operating within production clusters or integrated value chains in sectors such as agriculture, fisheries, plantations, and livestock. Meanwhile, KUR for Indonesia n migrant workers provides financing to support the costs associated with overseas employment. In terms of loan ceilings, KUR Super Micro provides financing of up to IDR 10 million , while KUR Micro ranges from above IDR 10 million to IDR 100 million and KUR Kecil ranges from above IDR 100 million to IDR 500 million. KUR for Indonesian migrant workers (PMI) provides financing of up to IDR 100 million to support placement and related costs. Special KUR can also provide financing of up to IDR 500 million, depending on the characteristics of the cluster and business needs. The imp lementation of the Kredi t

IDR 500 million. KUR for Indonesian migrant workers (PMI) provides financing of up to IDR 100 million to support placement and related costs. Special KUR can also provide financing of up to IDR 500 million, depending on the characteristics of the cluster and business needs. The imp lementation of the Kredi t Usaha Rakyat (KUR) programme has shown a generally increasing trend since 2015. KUR disb ursement increased steadily from IDR 22.75 trillion in 2015 and reached its peak rea lisation of IDR 365.5 trillion in

2022. This upward trajectory was driven by policy measures aimed at strengthening MSME financing and supporting economic recovery during the COVID-19 pandemic.

Following the peak in 2022, KUR disbursement gradually normalised in line with adjustments to programme policies. In 2025, the realisation of KUR disbursement reached IDR 270.08 tril lion, equivalent to 96.4 per cent of the annual target of IDR 280.15 trillion, benefiting approximately 4.59 million borrowers. As of 31 December 2025, the total outstanding KUR portfolio reached IDR 460 trillion, serving 53.90 million cumulative borrowers since the programme’s expansion. The non -performing loan (NPL) ratio remained relatively low at 2.19 per cent, indicating that the programme has maintained sound credit quality while continuing to expand financial access for MSMEs across Indonesia.6 

FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

Figure 1. Target and implementation of KUR (IDR Trillion)

Source: Statistics Indonesia (Badan Pusat Statistik)

Table 4. Government Guaranteed loans, SMEs (IDR Trillion) Year Kur Disbursement (IDR Trilion) KUR Outstanding (IDR Trilion 2016 94.40 70.67 2017 96.70 75.00 2018 120.30 125.87 2019 140.10 153.14

Year Kur Disbursement (IDR Trilion) KUR Outstanding (IDR Trilion 2016 94.40 70.67 2017 96.70 75.00 2018 120.30 125.87 2019 140.10 153.14 2020 198.53 231.22 2021 282.20 344.80 2022 365.50 490.00 2023 260.09 482.00 2024 282.44 481.00 During the period 2020–2024, disbursement under the People’s Business Credit Programme (Kredit Usaha Rakyat – KUR) increased significantly, reflecting the government’s efforts to support MSMEs du ring and after the COVID-19 pandemic. KUR disbursement rose from IDR 198.53 trillion i n 2020 to IDR 282.20 trillion in 2021, and further increased to IDR 365.50 trillion in 2022, marking the highest level in the period. This sharp increase was largely driven by government stimulus measures, including expanded KUR quotas and additional interest subsidies introduced to support MSMEs during the economi c recovery. Disbursement declined to IDR 260.09 trillion in 2023, before recovering to IDR 282.44 trillion in 2024. Meanwhile, KUR outstanding loans increased significantly from IDR 231.22 trilli on in 2020 to IDR 344.80 trillion in 2021, reaching a peak of IDR 490 trillion in 2022. After this peak , outstanding loans slightly declined to IDR 482 trillion in 2023 and IDR 481 trillion in 2024, indicating a stabilisation of the KUR portfolio in recent years. Following the directive of the President of the Republic of Indonesia, the Government set a 2025 target of IDR 298.92 trillion for the Government Credit Programme. The allocation comprised IDR 280.15 trillion for People’s Business Credit (KUR). By the end of 2025, disbursement for KUR consisted of IDR 270.08

IDR 298.92 trillion for the Government Credit Programme. The allocation comprised IDR 280.15 trillion for People’s Business Credit (KUR). By the end of 2025, disbursement for KUR consisted of IDR 270.08 trillion, demonstrating strong performance, accounting for the majority of the credit programme. 7

FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

Approximately 60.71% of KUR disbursements were directed towards the production sector. T he scheme reached 2.4 million new borrowers, supported the graduation of 1.3 million MSMEs to higher financing tiers, and contributed to the employment of approximately 13.77 million workers. The number of borrowers under the Kredit Usaha Rakyat (KUR) programme has shown a significant expansion since the programme’s scaling -up in 2015. The total number of borrowers increased from around 1 million in 2015 to a peak of 7.62 million in 2022. Figure 2. KUR Debtors (Million People)

This upward trend reflects the government’s continued efforts to expand financial access for Micro, Small, and Medium Enterprises (MSMEs), supported by various policy measures aimed at s trengthening KUR distribution. In particular, during the COVID-19 pandemic, the programme played an important r ole in supporting business resilience and economic recovery by widening access to subsidised credit for small businesses. Following the peak in 2022, the number of KUR borrowers adjusted to around 4.6 –4.9 million borrowers annually during the 2023-2025 period. This adjustment reflects the normalisation of KUR policies after the pandemic stimulus period, as well as an increase in the average loan size per borrower. As a result, while the total number of borrowers moderated, the programme continues to support MSMEs through more productive and sustainable financing. In terms of distribution by scheme, the majority of borrowers in 2025 were concentrated in the KUR Micr o

the total number of borrowers moderated, the programme continues to support MSMEs through more productive and sustainable financing. In terms of distribution by scheme, the majority of borrowers in 2025 were concentrated in the KUR Micr o scheme, accounting for 4,213,076 borrowers or approximately 69.83% of the total borrowers. This highlights the programme’s strong focus on micro-scale enterprises, which constitute the largest segment of MSMEs in Indonesia. Meanwhile, the KUR Small scheme accounted for 326,923 borrowers (29.98%), indicating the presence of enterprises that have expanded their financing needs as their businesses grow. Other schemes — including KUR Super Micro, KUR for Indonesian Migrant Workers (PMI), and KUR Special —represented a relatively small share of borrowers, collectively accounting for less than one per cent of total beneficiaries, as these schemes are designed to target more specific segments of borrowers. Efforts to increase MSME access to finance is promoted form both supply and demand side through MSMEs financial literacy. The low awareness of MSMEs financial records causes asymmetric information between banks and MSMEs, which affects the lending to MSMEs. One effort is by promot ing MSMEs financial management capacity through utilisation of digital applications for tr ansaction recordings. Financial literacy in general is also promoted, education programmes are conduc ted covering various areas such as digit al payments, increasing awareness for non-cash transaction, and general financi al education including financial knowledge, financial and investment planning, and consumer protect ion.8 

FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

Box 1. Definition of MSMEs in Indonesia Based on the Government Regulation Number 7 of 2021 Concerning Ease, Protection, and Empowerment of Cooperatives and Micro, Small and Medium Enterprises, SMEs/MSMEs are defi ned as enterprises with a maximum turnover of IDR 50 billion or maximum assets (excluding bu ilding land asset) of IDR 10 billion. The detailed classification is:

Empowerment of Cooperatives and Micro, Small and Medium Enterprises, SMEs/MSMEs are defi ned as enterprises with a maximum turnover of IDR 50 billion or maximum assets (excluding bu ilding land asset) of IDR 10 billion. The detailed classification is: • Micro-enterprise: business with maximum turnover of IDR 2 billion or assets (excluding land and building assets) maximum of IDR 1 billion • Small enterprise: business with a turnover more than IDR 2 billion up to the most IDR 15 billion or assets (excluding land and building assets) more than IDR 1 billion up to the most IDR 5 billion. • Medium enterprise: business with a turnover more than IDR 15 billion up to the most IDR 50 billion or assets (excluding land and building assets) more than IDR 5 billion up to the most IDR 10 billion • Large enterprise: business with a turnover above IDR 50 billion or assets (excluding l and and building assets) above IDR 10 billion Data covering the 2007-2009 period are not comparable with the 2010-2019 peri od because the methodology used to define MSMEs changed. The data used in 2007-2009 uses ceiling loans. Policy Orientation for 2026 At the Coordination Meeting of the Committee for MSME Financing Policy held on 17 November 2025, and taking into account the available fiscal envelope for interest subsidies/margi n subsidies, the 2026 target for Government Credit Program was set at IDR 332 trillion. The allocation comprises a ceiling of up to IDR 295 trillion for People’s Business Credit (KUR), up to IDR 300 billion for Agric ultural Machinery and Equipment Credit (Kredit Alsintan), up to IDR 500 billion for Labour-Intensi ve Industry Credit (KIPK), and up to IDR 36 trillion for the Housing Credit Program. The policy direction for KUR in 2026 is focused on generating tangible econo mic impact while ensuring the sustainability of MSME financing. These policy measures are stipulated under Regul ation of the Coup to IDR 36 trillion for the Housing Credit Program. The policy direction for KUR in 2026 is focused on generating tangible econo mic impact while ensuring the sustainability of MSME financing. These policy measures are stipulated under Regul ation of the Coordinating Minister for Economic Affairs No. 1/2026. Key policy measures include: • Prioritisation of production and export-oriented trade sectors. Production activities and exportoriented trade are designated as primary priorities under the 2026 KUR policy, reflecting the ir strategic role in driving economic growth and employment creation. • Regulatory relaxation to enhance financing flexibility. KUR 2026 introduces pol icy relaxations through maintaining affordable interest rates, removing limits on the frequency of loan agreements, and eliminating cumulative withdrawal ceilings. These measures aim to provide gr eater certainty and financing flexibility for productive enterprises to scale up operations and expand market access, including export markets. • Interest rate policy and sectoral allocation targets. The interest rate/margin for Micro an d Small KUR is maintained at 6% per annum (effective rate). In addition, restrictions on r epeated access to KUR are lifted for production and export-oriented trade sectors. The minimum share of KUR disbursement allocated to the production sector is increased from 60% to at least 65%. • Strengthening graduation and portfolio quality. To maintain lending quality, the Government continues to promote enterprise upgrading and graduation. For 2026, the programme sets a minimum target of 1.37 million new KUR borrowers and at least 1.1 million graduating borr owers. 9

FINANCING SMES AND ENTREPRENEURS 2026: INDONESIA © OECD 2026

Expansion of eligible collateral through Intellectual Property (IP). In line with Indonesia’s economic transformation towards an innovation and creativity based economy, KUR 2026 recogn ises Intellectual Property (IP) as eligible additional collateral. This policy is expected to support KUR disbursements to the creative economy sector of up to IDR 10 trillion in 2026. Post Disaster KUR Framework

transformation towards an innovation and creativity based economy, KUR 2026 recogn ises Intellectual Property (IP) as eligible additional collateral. This policy is expected to support KUR disbursements to the creative economy sector of up to IDR 10 trillion in 2026. Post Disaster KUR Framework In 2025, a tropical cyclone brought heavy rainfall, strong winds, and high tides to pa rts of Indonesia, particularly Sumatra, leading to floods, flash floods, and landslides that disrupted economic activities and community livelihoods. The provinces of Aceh, North Sumatra, and West Sumatra were among the areas experiencing significant impacts, prompting authorities to implement response and recovery measures. In line with the national KUR policy framework, the Government has also responded to the need for targeted measures in disaster-affected regions. At the Co-ordination Meeting of the Committee for MSME Financing Policy on 16 December 2025, a Post-Disaster KUR policy was establis hed for the Provinces of Aceh, North Sumatra, and West Sumatra. The policy is stipulated under Regulation of th e Co-ordinating Ministry for Economic Affairs No. 2/2026 on the Implementation Guidelines for Post-Dis aster KUR. The Post-Disaster KUR framework is structured into three phases. First phase – Impact assessment period (24 November 2025 to 31 March 2026) During this period, KUR borrowers in the three provinces are temporarily exempted from pri ncipal and interest repayments. Participating financial institutio