Bank Indonesia Urges Lenders to Speed Up Small-Business Credit as Growth Lags at 1.62%

JAKARTA, Investortrust.id — Amid the artisanal batik stalls and woven craft displays at the Jakarta Convention Center, Indonesia’s central bank made an earnest appeal to the nation’s commercial lenders to direct more liquidity toward Main Street.

Addressing senior cabinet officials and banking executives on Thursday (20/8/2026), Bank Indonesia Acting Governor Destry Damayanti noted that while financing for micro, small, and medium enterprises (MSMEs) has returned to positive territory at 1.62%, the pace remains too modest to power a broader economic lift.

The modest expansion reflects a nascent turnaround after months of contraction in small-business loan portfolios. Yet the low single-digit pace creates a sharp contrast with overall bank lending and large corporate credit, which have consistently advanced at double-digit rates above 10%. With 64 million micro and small enterprises employing 97% of the nation's workforce and generating over 60% of gross domestic product, monetary authorities view faster grassroots credit disbursement as essential to cement the recovery.

"MSME lending is our shared homework," Damayanti told attendees during the opening ceremony of the annual Karya Kreatif Indonesia (KKI) trade exhibition. "I want to encourage our banks: let's actively channel credit to MSMEs. Don't just shop at their booths—lend to them."

Closing the Growth Gap with the Real Economy

The central bank's encouragement reflects ongoing efforts to ensure that ample liquidity across commercial balance sheets flows evenly across all tiers of the economy rather than concentrating primarily in top-tier corporate balance sheets or safe-haven assets.

Damayanti emphasized that bolstering credit access for small enterprises directly advances the central bank’s statutory obligations under Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (P2SK), which tasks financial authorities with promoting equitable economic expansion and strengthening domestic resilience.

To accelerate disbursement, Bank Indonesia continues to recalibrate its macroprudential policy mix, offering liquidity incentives and favorable reserve requirements to institutions that actively expand their small-enterprise portfolios.

"From Bank Indonesia's side, we will continue fostering optimal synergy so our MSMEs can move up the value chain and sustain job creation," Damayanti added.

Cabinet Rally Behind Small Enterprises

The high-profile gathering underscored a coordinated government push to transition small businesses into higher-value processing, regional supply networks, and export markets.

Attendees included Second Lady Selvi Ananda Gibran Rakabuming, who heads the National Handicraft Council (Dekranas), Cooperatives Minister Ferry Juliantono, Creative Economy Agency Head Teuku Riefky Harsya, Tourism Minister Widianti Putri Wardhana, Vice Minister of Trade Dyah Roro Esti Putri, and Financial Services Authority (OJK) Board of Commissioners Chairwoman Frederica Widyasari Dewi.

Senior lawmakers from Parliamentary Commissions VII and XI, foreign ambassadors, and deposit insurance officials also attended the ceremony, underscoring broad policy consensus to help small-scale borrowers capture a larger share of the nation's banking momentum.