Jakarta. The government is planning to disburse Rp 300 trillion or around $18.5 billion in microloans for next year.

The Kredit Usaha Rakyat (KUR) program lets Indonesian micro, small and medium enterprises (MSMEs) to borrow money to their business at a very low interest rate. The government is planning to scale up this microloan program next year to help MSMEs, which contribute about 61 percent to the country's economy.

"We are aiming for up to Rp 300 trillion in microloan disbursement for next year. So we can reach more MSMEs and create a bigger economic impact," senior minister Airlangga Hartarto said.

Indonesia also wants to secure 2 million new microloan debtors in 2025. To this end, the government is planning to increase financing access for the country's migrant workers, among others.

As of Dec. 23, the annual microloan disbursement has reached nearly 280.3 trillion. This is about 100.1 percent of the target that the government had set for 2024, data shows. This also marked a 7.8 percent year-on-year (yoy) growth. The fundng went to around 4.9 million debtors. The productive sector also received 57.8 percent of the disbursed loans.

The non-performing loan rate stood at 2.19 percent, slightly lower than the national ratio of 2.21 percent. As of Oct. 2024, the government recorded about 2.5 million debtors so far this year.

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