Special Financing Scheme for Medium-Scale Enterprises

The Ministry of Micro-, Small-, and Medium Scales Enterprises (“ UMKM ”) is currently drafting new financing options for medium-scale enterprises. Bagus Rachman, Deputy for Medium Scale Enterprises at the Ministry of UMKM, stated that, at present, the financing assistance available to medium-scale enterprises tends to be limited.

“In the future, there will be a special scheme specifically for medium-scale enterprises,” Bagus told Hukumonline.

Bagus highlighted that, at present, the People’s Business Credit (Kredit Usaha Rakyat- “ KUR ”) financing scheme remains limited to small-scale enterprises, while no equivalent scheme is available for medium-scale enterprises. Therefore, he advocated for financing policies similar to KUR. For example, a Special Cluster KUR could be designed for medium-scale enterprises within the scope of UMKM holdings, with loan amounts ranging from Rp 5 billion to Rp 10 billion.

Although a dedicated financing scheme has not yet been established, Bagus stated that options remain available to adopt Peer-to-Peer (P2P) lending and Securities Crowdfunding, with funding limits of up to Rp 10 billion. Opportunities also exist for medium-scale enterprises to pursue an Initial Public Offering (“ IPO ”) on the stock exchange, provided they meet asset criteria ranging from Rp 50 billion to Rp 250 billion.

The potential for international funding from institutions such as the Asian Development Bank (ADB) or the Islamic Development Bank (IDB) for green UMKM programs implementing Environmental, Social, and Governance (ESG) principles also represents a viable option. “We are not limited to existing regulations, which happen not to specifically accommodate this yet,” he added.