Indonesian Banks Maintain Optimism on MSME Growth Potential

Strategic Approaches to MSME Financing

Major Indonesian banks are maintaining their optimism regarding the growth potential of the Micro, Small, and Medium Enterprises (MSME) sector despite the ongoing challenges. According to Permata Bank's CEO Meliza M. Rusli, the bank remains positive about MSME growth supported by new regulations and credit process digitalization ¹

Risk Management Strategies

To address the challenges, banks are implementing various risk management strategies. Permata Bank is focusing on prudent growth by targeting micro and MSME segments with established digital track records. They are also leveraging Innovative Credit Scoring (ICS) and ecosystem collaborations to strengthen MSME supply chains. Allo Bank's Director of Risk, Ganda Raharja Rusli, emphasized the importance of having a robust filtering strategy and close business monitoring to balance opportunities and risks in the MSME sector.

Economic Context and Market Performance

The MSME credit landscape showed a contraction in November 2025, with overall MSME credit declining by 0.7% year-on-year to Rp1.4938 trillion. This contraction was primarily driven by decreases in micro and medium-scale credits, which fell by 5.5% YoY and 0.6% YoY respectively. However, small-scale MSME credits showed positive growth, reaching Rp526.9 trillion with a 5.9% YoY increase, albeit at a slower pace than the previous month's 6.4% YoY growth.

Digital Transformation in MSME Financing

BSI's Director of Retail Banking, Kemas Erwan Husainy, highlighted the bank's strategy of adopting ecosystem-based financing by integrating into the value chain of industries such as halal businesses, Islamic boarding schools, and local communities. This approach, combined with digitalized business processes and more accurate credit scoring, helps mitigate risks while targeting growth opportunities.

The varied strategies employed by these major banks demonstrate their commitment to supporting MSME growth while managing associated risks in a challenging economic environment.