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View all search resultsMSMEs to get easier loans but with ‘rigorous’ assessment
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The head of the OJK's banking regulation and development department, Indah Iramadhini (second left), attends a press briefing on Sept. 19 on OJK Regulation 19 of 2025 in Jakarta. (JP/Divya Karyza)
T
he Financial Services Authority’s (OJK) decision to simplify borrowing for micro, small and medium enterprises (MSMEs) is a calculated risk that requires stringent oversight to prevent a surge in bad loans.
Josua Pardede, chief economist at Permata Bank, noted that, while the policy aims for greater financial inclusion through faster, tech-driven processes, the regulator was simultaneously erecting a comprehensive defense system.
“The new rules mandate banks to set clear risk limits, rigorously evaluate their credit assessment methods at least every three years and ensure any third-party scoring partners are licensed,” he told The Jakarta Post on Tuesday.
He highlighted that operational risks from digital partnerships were addressed with requirements for data security, adequate customer information and regular fee evaluations.
Josua pointed to the banking sector's current robust health, with a capital adequacy ratio (CAR) of 25.9 percent and a gross nonperforming loan ratio (NPL) of 2.28 percent, as a crucial buffer for this expansion.
However, he issued a note of caution: “Discipline is absolute. Banks must adhere to their risk management plans to ensure that easier access does not lead to systemic instability, particularly for smaller banks and nonbank lenders with thinner capital.”
Read also: New OJK regulation aims to ease MSME financing
