Jakarta, IDN Times – Bank Indonesia (BI) is strongly advocating for a fundamental shift in financing strategies, urging a greater focus on boosting productive sectors rather than merely pursuing overall credit growth. This transformative approach to financing is deemed crucial for enhancing national productivity, fostering robust job creation, and strengthening the global competitiveness of local businesses. The central bank emphasizes that this strategic pivot is essential for building a more resilient and dynamic economy that benefits all segments of society.
Destry Damayanti, BI Senior Deputy Governor, highlighted the imperative for this transformation to ensure that financing delivers maximal benefits to the broader economy. She articulated a vision moving beyond the sole pursuit of credit expansion towards achieving high-quality financing. This involves a transition from individual-focused financing to an ecosystem-based model, and from fragmented, standalone programs to a unified national orchestration achieved through synergistic collaborations among all relevant stakeholders. This comprehensive strategy aims to create a more integrated and impactful financial landscape.
“The impact of these policies must be tangible and felt by business actors across the spectrum, from large corporations to small traders, farmers, artisans, and young entrepreneurs in various regions,” Destry stated in a written press release on Friday, July 24, 2026. This statement underscores BI’s commitment to ensuring that financial policies translate into real-world improvements for everyday businesses, driving inclusive economic growth and development across Indonesia.
Empowering MSMEs for Productive Sectors and Economic Transformation
Within this strategic framework, strengthening financing for Micro, Small, and Medium Enterprises (MSMEs) emerges as a vital component in bolstering productive sectors and driving national economic transformation. MSMEs are recognized as the backbone of the Indonesian economy, contributing significantly to employment, innovation, and local economic resilience. Therefore, targeted support for these enterprises is not just beneficial but essential for achieving broader economic objectives.
In alignment with this overarching goal, Bank Indonesia continues to refine and strengthen its policy mix designed to encourage financing towards priority sectors. Key instruments in this effort include the Macroprudential Liquidity Incentive Policy (KLM) and the Macroprudential Inclusive Financing Ratio (RPIM). These policies are specifically crafted to incentivize financial institutions to channel funds into areas that promise higher economic impact and foster sustainable growth. By adjusting these macroprudential tools, BI can guide the flow of credit more effectively towards segments that are critical for national development.
Beyond traditional financing mechanisms, Bank Indonesia is also actively enhancing digitalization within the payment system. Initiatives such as QRIS (Quick Response Code Indonesian Standard), BI-FAST, and SNAP are continually being strengthened to expand the integration of business actors into the digital financial ecosystem. These digital platforms provide MSMEs with easier, faster, and more secure access to payment and financial services, reducing transaction costs and increasing efficiency. The seamless integration of these various policy instruments—macroprudential incentives and digital payment innovations—creates a complementary framework that supports more inclusive, productive, and impactful financing for the entire economy.
MSMEs: Strategic Drivers of the National Economy
The strategic importance of MSMEs in the national economy cannot be overstated. Loto Srinaita Ginting, Secretary of the Ministry of Cooperatives and Small and Medium Enterprises (UMKM), affirmed that MSMEs serve as crucial engines driving the national economy forward. Their widespread presence across diverse sectors and regions ensures economic activity at the grassroots level, providing livelihoods and fostering local entrepreneurship. Recognizing this vital role, the government is committed to implementing robust policies and programs aimed at broadening access to financing and enhancing the capacity and competitiveness of MSMEs.
Government initiatives to bolster MSMEs are multifaceted and comprehensive. These include the continuous strengthening of the People’s Business Credit (KUR) program, which offers subsidized loans to small entrepreneurs, making capital more accessible. Additionally, the government supports MSMEs through programs like the Free Nutritious Meals Program (MBG), which can create new market opportunities and stable demand for local producers. The formation of an MSME holding company is also on the agenda, designed to provide a more structured and integrated support system, facilitating better access to resources, markets, and advanced technologies for these businesses. These concerted efforts aim to create an environment where MSMEs can thrive and significantly contribute to national prosperity.
Despite the positive trend in credit growth and the accelerating digitalization among MSMEs, banking economist Josua Pardede suggests that there remains substantial room to expand financing into sectors that offer higher value-added potential, particularly within the processing industry. This sector, often characterized by innovation and higher productivity, can significantly contribute to economic diversification and resilience. Pardede’s insights highlight the need for a targeted approach to financing, ensuring that capital flows not just broadly, but strategically into areas that yield the greatest economic returns and foster long-term growth.
Josua further emphasized that MSME credit must continue to be driven through a synergistic implementation of various regulatory and incentive frameworks. This includes the Financial Services Authority (POJK) regulations concerning MSME credit, Bank Indonesia’s liquidity incentives, and the government’s priority programs. These initiatives must be carefully tailored by banks to align with specific market needs, ensuring their effectiveness and relevance. Maintaining stability in banking indicators is also a critical prerequisite for supporting productive MSME financing, especially for working capital, which is essential for day-to-day operations and expansion. Such stability is foundational for achieving inclusive growth in the years to come, providing a secure environment for businesses to flourish.
Robust Credit Growth Reflects Strong Financial Sector Support
Josua Pardede elaborated that the various policies implemented by Bank Indonesia and the government continue to provide robust support for banking financing. This coordinated effort has yielded tangible results, as evidenced by significant credit growth figures. In June 2026, credit growth reached an impressive 12.67 percent year-on-year (yoy), marking a notable increase compared to the previous month’s 11.51 percent (yoy). This upward trajectory in credit expansion clearly signals the financial sector’s increasingly strong support for economic activities across the nation.
This positive development serves as a crucial foundation for sustaining the momentum of economic growth in the future. The robust credit expansion is predominantly fueled by a substantial surge in investment credit, which recorded a high growth rate of 24.90 percent (yoy). Such significant growth in investment credit indicates that businesses are actively investing in new projects, expanding capacities, and modernizing operations, all of which are vital for long-term economic development and increased productivity. This signals a healthy appetite for expansion and a confident outlook on future economic prospects.
Bank Indonesia projects that overall credit growth for 2026 will remain robust, staying within a healthy range of 8-12 percent. This optimistic forecast is underpinned by several key factors that indicate strong potential demand for financing. A significant contributor is the substantial amount of undisbursed loans, which currently stands at Rp2,490 trillion. This figure represents 21.52 percent of the total available credit ceiling, indicating a vast reservoir of approved but unutilized funds that can be drawn upon by businesses. This latent demand provides a strong pipeline for future credit disbursement, ensuring sustained growth.
Furthermore, on the supply side, the banking sector’s lending appetite remains accommodative, reflecting banks’ willingness and capacity to extend credit. This favorable disposition is further supported by the healthy growth of Third Party Funds (DPK), which recorded a robust increase of 10.21 percent (yoy). The strong growth in DPK ensures that banks have ample liquidity to meet the rising demand for credit, creating a virtuous cycle where increased deposits fuel further lending. These combined factors—strong demand potential, an eager lending environment, and robust funding—create a conducive ecosystem for continued credit expansion, ultimately bolstering overall economic stability and growth.
