OJK Reveals the Causes of the Slowdown in the Distribution of SME Loans in the Last Year

JAKARTA - The Financial Services Authority (OJK) has revealed factors that have affected the slowdown in the distribution of micro, small and medium enterprises (MSMEs) in the past year, including being influenced by global and national economic dynamics.

The Head of the Banking Supervisory Board (KEPB) of the OJK, Dian Ediana Rae, noted a change in people's consumption patterns as an impact of the pressure on the purchasing power of the lower middle class.

Then, the credit risk of MSMEs is considered relatively higher than other segments. Dian also noted that the recovery process of MSMEs from the impact of the Covid-19 pandemic is relatively slower than corporations.

"The distribution of SME loans per position as of January 2026 has actually reached Rp. 1,482.99 trillion. Indeed, there is a trend of financing growth that tends to slow down in the past year," he said, quoted by Antara, Wednesday, March 4.

However, Dian said, banks are still quite optimistic about the growth of SME credit, reflected by the projection of this segment's credit which is believed to grow positively by the end of 2026.

He said that various programs and policies from the government are expected to encourage the distribution of credit to MSMEs debtors with good business prospects to expand.

Regarding government programs and policies, OJK supports the distribution of small business loans or people's business loans (KUR) as well as other program loans that are generally aimed at MSMEs.

Some of the OJK's roles in the development of MSMEs include supporting the preparation of the Minister of Coordinating Minister for Economic Affairs Regulation regarding people's business loans (KUR) and program loans.

OJK also supervises financial services institutions that distribute KUR and other credit programs, as well as supporting institutions such as credit guarantees and insurance.

As a form of support for the distribution of SME loans, OJK has issued the OJK Regulation (POJK) on SME Financing Access which requires banks and non-bank financial institutions (LKNB) to provide inclusive and affordable financing schemes so that it is expected to facilitate SME access to financing.

Furthermore, OJK has also officially formed the Department of Regulation and Development of MSMEs and Islamic Finance as a form of commitment and support for government programs as well as encouraging and advancing MSMEs sustainably.

For information, the distribution of banking credit in January 2026 reached Rp8,557 trillion or grew by 9.96 percent (year on year/yoy), increasing compared to the position of December 2025 which grew 9.63 percent yoy.

Based on the type of use, investment credit grew the highest, namely by 22.38 percent year-on-year, followed by consumer credit of 6.58 percent year-on-year. Meanwhile, working capital credit was recorded to have grown by 4.13 percent year-on-year.

Based on the debtor category, corporate loans grew by 16.07 percent year-on-year. Meanwhile, when viewed from ownership, state-owned bank loans grew by 13.43 percent year-on-year.