Antara News·Indonesia·Monday, November 2, 2026 at 03:17 PM UTC

Indonesia earmarks Rp2.6 trillion to subsidize microloans for women

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Bayu Saputra, Uyu Liman

Jakarta (ANTARA) - The Indonesian government has allocated Rp2.6 trillion (approximately US$143.20 million) to subsidize interest rates under the PNM Mekaar microfinancing scheme, slashing borrowing costs to a flat 8 percent per year.

Micro, Small, and Medium Enterprises (MSMEs) Minister Maman Abdurrahman said here on Monday that the provisional budget will support the credit scheme through the end of December 2026.

"For now, roughly Rp2.6 trillion has been earmarked through the end of December. We will reassess the budget to determine how many borrowers can be covered within this remaining two-month timeframe," Abdurrahman said following a ministerial coordination meeting on financing for women's empowerment.

The PNM Mekaar initiative — also called the Underprivileged Women's Credit (KPPS) program — is administered by state-owned microfinance firm PT Permodalan Nasional Madani (PNM). The scheme specifically targets women from low-income households who run or plan to start micro- and ultra-micro enterprises.

Under the subsidized program, eligible borrowers can access productive loans capped at Rp15 million (around US$826) per contract, with a flat annual interest rate or financing margin of 8 percent.

This new rate represents a steep reduction from previous commercial lending rates, which typically ranged between 18 percent and 25 percent annually.

The program is scheduled for a nationwide rollout in the second week of November.

Abdurrahman explained that the launch had been slightly pushed back from its original timetable to accommodate field trials and operational adjustments. A pilot involving approximately 2,000 borrowers was carried out to identify and resolve systemic bottlenecks ahead of the broader launch.

"We decided to conduct field trials first rather than rushing implementation. The trial covered around 2,000 Mekaar women clients, and we have thoroughly evaluated the findings," he added.

Abdurrahman also affirmed that the 8 percent flat rate for the PNM Mekaar program will remain a permanent policy moving forward.

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