OJK Sets Sights on 90% UMKM Credit Guarantee Target by 2028

Ambitious Goal Reflects Sector Importance

The Financial Services Authority (OJK) has announced an ambitious target to increase the contribution of micro, small, and medium enterprises (UMKM) credit guarantees to 90% of the total portfolio by 2028. This move underscores the growing importance of the UMKM sector in Indonesia's economic landscape. According to Asippindo, the current contribution stands at around 70%, demonstrating that while progress has been made, significant effort is still required to reach the target.

Industry Response and Challenges

Agus Supriadi, Secretary General of Asippindo, stated that while the target is considered realistic, it cannot be achieved through aggressive measures alone. The high credit risk associated with the UMKM segment necessitates a balanced approach to growth and risk management. The industry must navigate these challenges while continuing to support UMKM growth through credit guarantees.

Implications for Credit Guarantee Industry

The OJK's target highlights the critical role that credit guarantee companies play in supporting UMKM access to finance. As the sector moves towards the 2028 deadline, industry players will need to enhance their risk assessment capabilities while expanding their outreach to UMKM participants. This balance between risk management and growth will be crucial in achieving the OJK's ambitious target.