Government Cuts Interest Rate on Mutual Loans to 8 Percent Starting September 2026

JAKARTA - The government has set a reduction in the interest rate for the Membina Ekonomi Keluarga Sejahtera (Mekaar) loan program managed by PT Permodalan Nasional Madani (PNM) to around 8 percent, from the previous average of 20 percent and is targeted to be implemented starting in early September 2026.

Minister of Micro, Small and Medium Enterprises (UMKM) Maman Abdurrahman stated that the decision was a follow-up to President Prabowo Subianto's instructions to reduce the financing burden borne by participants in the Mekaar program.

Maman said the government had held a coordination meeting with the Coordinating Minister for Economic Affairs, Danantara, and the Director General of the Treasury of the Ministry of Finance to formulate a scheme for implementing the policy.

"Alhamdulillah, the formulation, pattern, and mechanism have been found and decided, the interest is approximately 8 percent. So, from the figure, approximately 20 percent, based on the story from the President, it will be reduced to 8 percent," said Maman to the media, Wednesday, August 12.

According to Maman, the interest rate that has been imposed on Mekaar participants is in the range of 18 percent to 24 percent, with an average of around 20 percent, and the program has currently been followed by around 14 million women.

"So, thank God, it is the direction and order from the President that the interest that has been received by, received by the mothers who are included in the Mekaar program, which is approximately 14 million, the interest is approximately 20 percent average," he said.

He explained that the President asked that the interest rate for Mekaar financing be suppressed below 10 percent to prevent the financing burden from becoming heavier for the pre-prosperous community.

"The order from the President must be pushed below 10 percent so that it does not burden him, mothers who are in the group of the prosperous," he said.

Maman said the government had also agreed on the combination and financing mechanism needed to keep the interest rate on loans at around 8 percent and the implementation of this policy is targeted to begin in early September 2026.

"And, we have also received a combination with Danantara, God willing, it will start to apply in the estimate of approximately early September," he said.

He emphasized that the government would accelerate the implementation of the policy so that the benefits of interest reduction could be immediately felt by millions of participants in the Mekaar program.

"Because, the order from the President must be immediately accelerated so that it can be immediately enjoyed by the Mekaar program mothers," he said.

With this interest rate reduction, Maman said the government hopes that Mekaar participants, especially women from the pre-prosperous group, can obtain access to financing with a lighter cost burden.

"Well, that is the hope of the President that the small people should not be burdened with high interest rates. So, now it has been decided at 8 percent. And, later in early September it will come into effect," he concluded.