Indonesia's government has raised the KUR credit ceiling to Rp320 trillion for 2026, removing loan frequency limits and setting a flat 6% interest rate. UMKM Minister Maman Abdurrahman reaffirmed that applications for KUR under Rp100 million require no collateral, while acknowledging some banks still demand it.
On November 17, 2025, UMKM Minister Maman Abdurrahman announced the KUR ceiling increase to Rp320 trillion starting January 1, 2026, during meetings with DPR Commission VII and the KUR Policy Committee Coordination Meeting in Jakarta. The policy also eliminates loan frequency limits—previously two times for trade and four for production—and sets a flat 6% annual interest rate, down from progressive rates up to 9%.
Maman explained the move aims to prevent growing UMKM from shifting to conventional credit at 14-15% interest, which often leads to repayment issues. "Those who have accessed KUR four times, then they are no longer eligible for the program, they enter conventional credit with interest around 14-15 percent, often their businesses can't handle it," he said.
KUR distribution now involves multiple ministries for broader reach: the UMKM Ministry focuses on village tourism development; the Creative Economy Ministry receives Rp10 trillion for holders of Intellectual Property Rights; the Ministry of Protection for Indonesian Migrant Workers for ex-migrants starting businesses; and the Ministry of Housing and Settlements with Rp130 trillion for the housing sector. Total allocations across ministries approach Rp500 trillion.
Maman reaffirmed that under Economy Coordinating Ministry Regulation No. 1 of 2023, KUR from Rp1-100 million requires no collateral. However, he acknowledged rogue bank officials at institutions like BRI, Mandiri, and BNI still demand it for risk mitigation and psychological pressure to avoid moral hazard, especially for debtors with low trust based on SLIK records. "I emphasize again, KUR applications from Rp1 million to Rp100 million are completely without collateral," he stated. The UMKM Ministry will sanction violating banks by withholding KUR subsidies—cases already exist—and launch the integrated reporting platform Sapa UMKM in December 2025.
