Alfi Dinilhaq, Jakarta – Indonesia's banking credit growth remained firmly above 10% in the first quarter of 2026, supported by strong lending to corporate and consumer segments, even as micro, small, and medium enterprises (MSMEs) continued to face pressure.
The Economic Affairs Ministry reported that national credit expanded 10.42% year-on-year (yoy) in Q1 2026, reflecting resilient financing activity amid efforts to maintain financial stability.
By segment, corporate lending posted the strongest growth at 14.29%, followed by consumer credit at 13.97% and commercial loans at 11.11%. In contrast, MSME credit contracted by 3.57%, indicating ongoing consolidation in the segment.
Government spokesperson Haryo Limanseto said the increase in outstanding loans and borrower numbers signals that banks' intermediation function remains intact.
"The rise in outstanding credit and the number of borrowers reflects that banking intermediation continues to function optimally in supporting economic activity and expanding access to financing," Haryo said on Monday.
The government views the contraction in MSME credit as manageable and part of a broader adjustment toward a healthier financing structure.
Amid pressure in the micro segment, the People's Business Credit (KUR) program remained a key instrument in maintaining access to financing. In Q1 2026, KUR grew modestly by 0.21% (yoy), with outstanding loans reaching Rp 522 trillion ($30.4 billion).
Meanwhile, the Housing Financing Program (KPP), launched in October 2025, showed early traction with outstanding loans totaling Rp 15.76 trillion as of March 2026.
Overall, government-backed credit programs, including KUR, housing loans, agricultural machinery financing, and labor-intensive industry credit, grew 3.23% (yoy).
The government also noted a rise in non-performing loans (NPL) in the MSME segment, reaching 4.55% in March 2026. However, KUR's asset quality remained relatively sound, with an NPL ratio of 2.16%.
"This shows that the KUR policy design, supported by a strong guarantee scheme, can maintain a balance between expanding financing access and prudent risk management," Haryo said.
The guarantee scheme itself remained solid, covering 70% of the KUR portfolio, with a claim ratio of 62.8% and a non-performing guarantee (NPG) ratio of 2.8%.
As part of its adaptive policy approach, the government has also rolled out post-disaster KUR schemes under Coordinating Minister Regulation No. 2/2026, targeting affected areas in Aceh, North Sumatra, and West Sumatra.
The policy aims to support MSME recovery in disaster-hit regions through loan restructuring measures, including tenor extensions, grace periods, and interest subsidies – bringing effective interest rates to 0% in 2026 and 3% in 2027.
KUR disbursement in the three provinces has reached Rp 6.04 trillion, benefiting more than 93,000 borrowers.
Looking ahead, the government plans to strengthen alignment between MSME financing policies and priority programs such as the Free Nutritious Meals (MBG) initiative, the 3 Million Houses program, and job creation efforts.
This approach is expected to balance credit access with household purchasing power while supporting sustainable economic growth.