Based on National Labor Force Survey (Sakernas), published by the Ministry of Micro, Small, and Medium Enterprises (MSMEs) of the Republic of Indonesia, the number of MSMEs reached 56 142 687 units in 2024, representing 99.90% of the total business population. MSMEs contributed 59.64% to the national Gross Domestic Product (GDP) in 2024, underscoring their significant and strategic role in Indonesia’s economic development.
Outstanding loans to MSMEs recorded a slight decline of 0.30% y-o-y in 2025, decreasing from IDR1 506.29 trillion in 2024 to IDR 1 501.73 trillion in 2025. Furthermore, the share of MSME loans in total outstanding loans has shown a declining trend over the past five years, falling from 22.02% in 2021 to 17.49% in 2025, with an average yearly share of approximately 20,06%.
Over the last three years (2023 – 2025), non-performing loans (NPLs) for total businesses have declined from 2.19% to 2.05%. In contrast, NPLs form MSMEs have increased from 3.71% to 4.33%
Outstanding loans granted by finance companies to all businesses increased slightly, by 0.61% in 2025. However, financing to MSMEs declined significantly, by 17.64%, falling from IDR 180.48 trillion in 2024 to IDR 148.65 trillion in 2025. Consequently, the MSME share of total financing decreased from 34.09% to 27.90%. The proportion of short-term MSME financing in total outstanding MSME financing by finance companies also declined sharply, from 16.23% in 2024 to 2.40% in 2025.
Interest rates on loans provided by finance companies to MSMEs increased from 20.35% in 2024 to 20.53% in 2025. In contrast, the financing rates to large firms declined from 14.45% to 13.67%. Consequently, the interest rate spread widened from 5.90% to 6.87%.
As an alternative source of MSME financing, apart from finance companies, venture capital companies can also play an important role in the growth and development of MSMEs. However, in Indonesia, venture and growth capital financing remained relatively stagnant over the past three years, with fluctuating amounts of IDR 17.03 trillion in 2023, IDR16.48 trillion in 2024, then IDR 16.58 trillion in 2025, representing a decrease of 2.64% during those years.
Other non-bank finance indicators recorded a modest decline in 2025 compared to 2023. Leasing and hire purchases financing contracted by 1.49% over the period, while factoring activities also exhibited a similar trend, declining by 3.16%.
Access to finance remains a challenge for many SMEs in Indonesia. To address this issue, the Government of Indonesia continues to support SME financing through the People’s Business Credit Programme (Kredit Usaha Rakyat – KUR) and other financing schemes aimed at improving access to affordable credit and supporting SME growth.