Indonesia’s Financial Services Authority (OJK) has launched a landmark regulation to expand financing access for micro, small, and medium enterprises (MSMEs)—the backbone of the national economy. The new rule, POJK 19/2025, mandates banks and non-bank financial institutions to simplify, accelerate, and innovate their lending practices while maintaining sound governance. As MSME credit growth lags behind other sectors, this regulation aims to unlock their full potential in driving sustainable and equitable development.
Key Facts & Background:
- Regulation: Peraturan OJK Nomor 19 Tahun 2025 (POJK 19/2025) on MSME Financing Access
- Effective Date: Two months after enactment on September 2, 2025
- Legal Basis: Follows the mandate of Law No. 4/2023 on Financial Sector Development and Strengthening (UU P2SK)
- Target Institutions:
- Banks (including commercial, rural, and Islamic banks)
- Non-Bank Financial Institutions (LKNB), including:
- Financing companies
- Venture capital firms
- Microfinance institutions
- Peer-to-peer lending platforms
- Pawnshops
- LPEI and PNM
- Key Provisions:
- Simplified credit eligibility and assessment for MSMEs
- Acceptance of intellectual property as collateral
- Use of alternative credit scoring (PKA)
- Fair and transparent financing costs
- Mandatory MSME financing plans and reporting to OJK
- Risk management and governance requirements
- Collaboration across financial institutions and stakeholders
- Digital ecosystem development and consumer protection
- Incentives for institutions actively supporting MSME financing
- Credit Growth Data (July 2025):
- Total bank credit: Rp8,043.2 trillion (+7.03% YoY)
- Investment credit: +12.42%
- Consumer credit: +8.11%
- Working capital credit: +3.08%
- Corporate credit: +9.59%
- MSME credit: +1.82%
- High-growth sectors:
- Mining and quarrying: +20.69%
- Services: +19.17%
- Transport and communications: +17.94%
- Utilities (electricity, gas, water): +11.23%
Strategic Insights:
The issuance of POJK 19/2025 marks a pivotal moment in Indonesia’s financial inclusion agenda. Despite MSMEs contributing significantly to employment and GDP, their access to formal financing remains constrained by rigid requirements, limited collateral options, and high transaction costs. By mandating tailored financing schemes and embracing alternative credit scoring, OJK is pushing the financial sector to evolve beyond traditional models and meet the diverse needs of MSMEs.
The regulation’s emphasis on governance and risk management ensures that financial innovation does not compromise stability. Requiring institutions to submit MSME financing plans and monitor performance introduces accountability and data-driven oversight. Moreover, the acceptance of intellectual property as collateral reflects a progressive shift toward recognizing intangible assets in the digital economy.
Digitalization plays a central role in POJK 19/2025, with provisions encouraging the use of fintech platforms and integrated credit ecosystems. This aligns with broader national strategies to modernize financial services and empower underserved segments. The regulation also incentivizes proactive institutions, fostering competition and collaboration across the financial landscape.