Indonesia Implements Major Reforms to KUR Microfinance Program

Fixed 6% Interest Rate Structure

The Indonesian government has introduced significant changes to the Kredit Usaha Rakyat (KUR) microfinance program starting January 2026. The most notable change is the implementation of a flat 6% interest rate for all KUR loans, regardless of whether it's the borrower's first or subsequent loan ¹

Enhanced Accessibility and Oversight

Key features of the new KUR policy include:

1. No collateral required for loans up to Rp 100 million ²
   Source 2

   https://finance.detik.com/moneter/d-8215189/pengajuan-kur-sampai-rp-100-juta-tanpa-agunan
2. Removal of loan frequency restrictions - businesses can now access KUR multiple times without limits ³
   Source 3

   https://finance.detik.com/moneter/d-8215023/program-kur-serap-11-juta-lapangan-kerja-menteri-umkm-mayoritas-informal
3. Increased budget allocation - KUR budget for 2026 has been set at Rp 300 trillion, up from Rp 286.61 trillion in 2025 ³
   Source 3

   https://finance.detik.com/moneter/d-8215023/program-kur-serap-11-juta-lapangan-kerja-menteri-umkm-mayoritas-informal
4. Stricter oversight - new integrated reporting system 'Sapa UMKM' launching in December 2025 to monitor compliance and report violations ²
   Source 2

   https://finance.detik.com/moneter/d-8215189/pengajuan-kur-sampai-rp-100-juta-tanpa-agunan

Impact on UMKM Sector

The KUR program has shown significant impact on the UMKM sector, with:

• 4 million debitur reached as of November 15, 2025
• Potential job creation estimated between 7.7 million to 11.6 million jobs ⁵
  Source 5

  https://finance.detik.com/moneter/d-8215375/bunga-dipatok-6-anggaran-kur-tahun-depan-rp-300-t
• 60% of KUR allocation going to the production sector in 2025 ⁵
  Source 5

  https://finance.detik.com/moneter/d-8215375/bunga-dipatok-6-anggaran-kur-tahun-depan-rp-300-t

Implementation and Compliance

While the new regulations bring more favorable terms for borrowers, the government has also emphasized stricter enforcement. Minister Maman Abdurrahman noted that some banks still required collateral despite regulations stating otherwise, and warned of penalties for non-compliant banks, including withholding KUR subsidies ²