Indonesia Launches 8% Credit Scheme for Women Entrepreneurs

The Indonesian government is expanding financing opportunities for women entrepreneurs from underprivileged households through the Pre-prosperous Women Credit (KPPS) scheme.

As per a press release issued by the Coordinating Ministry for Economic Affairs on August 13, the scheme provides productive financing at a flat interest rate or margin of 8% per year. Each facility offers up to IDR 15 million, with no additional collateral required.

Coordinating Minister for Economic Affairs Airlangga Hartarto, who chairs the Policy Committee for MSME Financing, issued Regulation No. 7 of 2026 to establish guidelines for implementing the KPPS scheme.

Enacted on August 5, 2026, the regulation provides the legal framework for supporting women from underprivileged households who are either operating businesses or planning to start new ventures.

Key Highlights:

• Women entrepreneurs can access loans at 8% interest, up to IDR 15 million
• KPPS offers financing along with business training and financial education
• The scheme could benefit 9.16 million women in ultra-micro businesses

The policy is in line with President Prabowo Subianto's guidance to ease the burden of financing for the most vulnerable groups in the society. Earlier, the financing for the ultra-micro entrepreneurs, especially women of slum households, was around 24% per year.

The burden is lowered to a simple 8%/year through government subsidy of interest or margins via KPPS. KPPS aims to reach out to women belonging to the low-income households confirmed by the national single social-economic data, that is, in the first four decades.

Applicants would need a Population Identification Number (NIK) and family card too and at least five members in an area. The financing limit is determined with the maximum amount of IDR 15 million per facility per recipient, and the amount can be disbursed in one or more phases, as agreed with the lender.

There are also a number of other places where KPPS are available and no restriction on how many times they can apply for. Financing period can be no longer than 24 months or up to 36 months outside of restructuring arrangements.

The financing goes towards productive sectors such as agriculture, maritime and fisheries, processing industries, construction, tourism, trade and production services. KPPS is not only about funding but also incorporates an empowerment program. The lenders need to offer assistance, financial management education for households, financial management education for businesses, and business capacity building and entrepreneurship training.

Recipient groups will also put in place a system of collective liability to foster discipline and solidarity among its members. In addition, the RPPS beneficiaries can also join a separate Workers Social Security Agency (BPJS Ketenagakerjaan).

The government is also protecting them by blocking lenders from asking for more collateral than the business or assets in question. Coordinating Ministry for Economic Affairs Regulation No. 7 of 2026 has been published in the State Gazette of the Republic of Indonesia, 2026 No. 548 and entered into force on the date of enactment.

The Coordinating Ministry for Economic Affairs will then draft legal agreements and an information system in cooperation with other ministries and government agencies, financial services regulators, and potential lenders. The number of potential recipients of KPPS in Indonesia has been estimated to be 9.16 million women who are engaged in ultra micro business activities.