Antara News·Indonesia·Tuesday, August 18, 2026 at 12:09 PM

Indonesia launches women's microcredit scheme at 8 pct interest

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Bayu, Kenzu

Jakarta (ANTARA) - The government has issued guidelines for the Underprivileged Women's Credit (KPPS) program, offering a flat interest rate of 8 percent per year.

The guidelines are set out in Coordinating Economic Affairs Ministerial Regulation No. 7 of 2026, which serves as the legal basis for KPPS, a credit scheme providing productive financing for women from underprivileged families who are running or planning to start a business.

"The ministerial regulation follows up on President Prabowo Subianto's directive to significantly lower financing interest burdens for the most vulnerable groups," Coordinating Economic Affairs Minister Airlangga Hartarto said in a statement here on Tuesday.

Through KPPS, recipients can obtain financing with a flat interest or margin rate of 8 percent per year, a ceiling of up to Rp15 million per agreement, and no additional collateral requirements.

Until now, ultra-micro business operators, particularly women from underprivileged families, have borne financing interest rates of around 24 percent per year.

Through KPPS, this interest burden is cut to a flat 8 percent per year, with government support in the form of interest or margin subsidies.

KPPS targets women from underprivileged families verified under the National Single Social and Economic Data (DTSEN) in deciles 1 through 4.

Prospective recipients must also have a national identity number (NIK) and family card (KK), and be part of a group of at least five people from the same neighborhood.

"So that no eligible beneficiaries are left behind, the regulation also allows distributors to objectively assess prospective recipients' eligibility according to applicable criteria," Hartarto said.

Recipients can access KPPS again through multiple agreements without a limit on frequency, allowing financing to grow alongside business expansion.

The financing term is set at a maximum of 24 months and, outside of restructuring schemes, can be extended up to a maximum of 36 months. Payment mechanisms are agreed upon between the recipient and distributor.

KPPS financing is directed toward productive activities, including agriculture, maritime and fisheries, manufacturing, construction, tourism, trade, and production services.

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