Bank Indonesia urges small businesses to improve governance for loans

Surabaya, East Java (ANTARA) - Bank Indonesia is calling on micro, small, and medium enterprises (MSMEs) to strengthen their corporate governance to meet commercial banking standards and secure formal financing to scale up operations.

Speaking at the opening of the 2026 Java Sharia Economic Festival (Fesyar) in Surabaya, East Java, on Saturday, central bank Governor Destry Damayanti highlighted the Indonesian Intermediation Acceleration Program (PINISI) as a key vehicle to connect small businesses with lenders.

"The PINISI Program serves as a platform bringing together parties with a shared goal: driving economic growth through bank lending," Damayanti said.

While national bank credit growth reached 13.6 percent, Damayanti noted that lending to MSMEs continues to lag, underscoring the need to strengthen financial intermediation and widen credit access for small entrepreneurs.

As part of the initiative, the central bank connected 50 MSMEs with Islamic commercial banks through structured business-matching sessions, enabling several firms to secure financing partners.

An additional 100 MSMEs arranged through the Indonesian Chamber of Commerce and Industry (Kadin) are slated for future sessions, following necessary vetting procedures and bank evaluations.

Central bank officials identified poor financial record-keeping and lack of operational track records as primary hurdles preventing small enterprises from passing formal credit risk assessments.

To address these barriers, Bank Indonesia is guiding small businesses to standardize financial reporting and operational management.

Damayanti emphasized that expanding small business credit requires coordinated efforts among central bankers, commercial institutions, business owners, and regional industry chambers.

Translator: Astrid Faidlatul, Raka Adji
Editor: Aditya Eko Sigit Wicaksono
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