Online Loan Fund Allocation for MSMEs in Indonesia

The results of the Kadatada Insight Center (KIC) survey show that online or digital loans (pindar) have become one of the main sources of funding used by SME respondents to run their businesses.

"The funds received by SMEs are not used for passive or consumption purposes, but are reinvested back into business operations," KIC wrote in the report From Alternative to Imperative: The Vital Role of the Pindar Industry in Indonesia's Digital Economy.

Based on their allocation, 16.9% of respondents use loans as capital to purchase raw materials.

Other allocations are for long-term needs, such as business expansion, purchasing production equipment, enlarging storage warehouses, and business training.

Here are the details of the allocation of loan capital from pindar by SME respondents, based on the KIC survey.

1. Purchase of raw materials: 16.9%
2. Business expansion (opening new regions/expanding reach): 11.3%
3. Operational costs: 11.2%
4. Payments to suppliers/principals: 10.9%
5. Purchase of production equipment: 10.6%
6. Purchase of vehicle assets: 6.4%
7. Enlarging storage warehouses: 5.7%
8. Marketing (creating advertising content, promotional programs, etc.): 5.6%
9. Addition/enhancement of workforce: 5.4%
10. Product innovation (variation, certification, etc.): 4.0%
11. Administrative costs: 3.7%
12. Business training/mentoring: 3.7%
13. Others: 1.8%

The KIC survey was conducted in collaboration with the Indonesian Co-Financing Fintech Association (AFPI) by surveying 309 business owners or SME management who obtained capital from AFPI member pindar platforms.

Data collection was conducted online from December 22, 2025 to January 12, 2026.

The KIC survey report with AFPI can be downloaded via this link.