Small Business Boom: Indonesia’s KUR Program Nears Goal
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Indonesia’s flagship KUR program provided significant financial support to millions of small businesses in 2025, but questions remain about the quality of jobs created.
- Rp270 trillion (US$16 billion) disbursed through the KUR program in 2025.
- The program supported 4.58 million borrowers, exceeding the target by 117 percent.
- Allocations to the production sector reached a record 60.7 percent.
- Most jobs created remain in the informal sector, prompting a need for strategic adjustments.
What is the People’s Business Credit (KUR) program and why does it matter? The KUR program is a government initiative designed to provide affordable financing to micro, small, and medium-sized enterprises (MSMEs) in Indonesia, a critical engine of economic growth.
According to Minister for Micro, Small and Medium Enterprises (MSMEs) Maman Abdurrahman, the Rp270 trillion disbursement represents 96 percent of the Rp280 trillion (US$16.5 billion) target. Speaking in Jakarta on Tuesday, Abdurrahman noted the program extended support to 4.58 million borrowers, including 2.7 million new debtors—a figure that surpassed expectations by 117 percent.
Beyond Numbers: A Focus on “Graduated” Entrepreneurs
The ministry also reported exceeding its goal for “graduated debtors”—entrepreneurs who have successfully scaled their businesses to higher categories—achieving 131 percent of the target. This suggests the program isn’t just about survival, but about fostering growth.
Research from Indonesia’s National Research and Innovation Agency (BRIN) estimates the program’s employment impact to be between 7.7 and 11.6 million jobs, with each KUR recipient typically employing two to three workers. That’s a substantial contribution to the Indonesian workforce.
The Informal Sector Challenge
Despite these successes, Abdurrahman cautioned that the majority of jobs created through the program remain within the informal sector. “This is an important evaluation note for us,” he said. “Next, we will formulate strategies to ensure that jobs created through KUR enter the formal sector, so they can receive better guarantees and protection.”
Beyond simply providing loans, the ministry has focused on streamlining business licensing and enhancing competitiveness through certification programs. In 2025, the Indonesian Investment Coordinating Board (BKPM) issued 3 million Business Identification Numbers (NIB), while the Halal Product Assurance Agency (BPJPH) granted 2.8 million halal certifications. The National Standardization Agency (BSN) also simplified Indonesian National Standard (SNI) certification for over one million micro and small enterprises, aiming to improve product quality and market access.
Abdurrahman emphasized that while these certifications are managed by other agencies, his ministry is committed to supporting their growth.
What do you think? Is focusing on formalizing jobs the key to unlocking the full potential of Indonesia’s small business sector? Share your thoughts in the comments below.
