JAKARTA - The Executive Director of the Center of Reform on Economics (CORE) Indonesia Mohammad Faisal assessed that the prospects for financing micro, small and medium enterprises (MSMEs) in 2026 will be better than the previous year, in line with the trend of increasing domestic consumption which has been consistent for the past few months.
According to him, the main problem that has affected the growth of SME credit so far is not from the side of financing supply, but from the demand for goods and services produced by SMEs.
"When there is a decrease in interest rates, including the People's Business Credit (KPR), and liquidity injection in the banking sector, it does not necessarily increase credit demand, because the problem is more from the demand side," said Faisal as quoted by ANTARA, Monday, January 19.
According to Faisal, the trend of increasing domestic demand in recent months, although not entirely related to UMKM products, will still help improve credit distribution.
He said the demand came mainly from the upper middle class, some of whom were also consumers of goods and services products from MSMEs.
However, he emphasized the need for policies that focus more on increasing demand among the lower middle class, which has a greater correlation with UMKM products.
"The meaning of the stimulus here is not social assistance, but job creation and income increase," he said.
In addition, other supporting aspects also need to be strengthened, such as management and financial assistance for MSMEs, as well as the use of digitalization trends to expand market access.
"Most micro-businesses are still local with customers nearby, so they need support from digital platforms so that they can reach a wider market," he said.
According to data from the Financial Services Authority (OJK) as of January 2026, bank credit in November 2025 grew 7.74 percent (year-on-year/yoy) to Rp8,314.48 trillion.
Growth was mainly contributed by the transportation and warehousing sector of 18.33 percent, electricity, gas, and water procurement of 21.83 percent, mining industry of 11.0 percent, and construction of 8.14 percent.
However, from the debtor's side, SME loans actually contracted by 0.64 percent (yoy), different from corporate loans which grew by 12.06 percent (yoy).
Investment loans recorded the highest growth of 17.98 percent (yoy), while consumer loans grew 6.67 percent (yoy) and working capital loans 2.04 percent (yoy).
On the other hand, the Third Party Fund (DPK) continued to grow by 12.03 percent (yoy) to Rp9,899.07 trillion.
The decline in bank interest rates also continued, with the weighted average rupiah credit interest rate falling 26 basis points (yoy) to 8.97 percent in November 2025, mainly driven by a decline in productive credit interest rates.
The English, Chinese, Japanese, Arabic, and French versions are automatically generated by the AI. So there may still be inaccuracies in translating, please always see Indonesian as our main language. (system supported by DigitalSiber.id)
