These 5 Provinces Received the Largest Disbursement of UMKM Credits from Banks

Data Bank Indonesia reports that DKI Jakarta had the highest UMKM (Micro, Small, and Medium Enterprises) credit in August 2019, reaching Rp156.48 trillion. Following provinces were East Java (Rp155.39 trillion), West Java (Rp148.53 trillion), Central Java (Rp123.74 trillion), and North Sumatra (Rp59.99 trillion). These five provinces exceeded the national average UMKM credit of Rp32.28 trillion.

Total UMKM credit disbursed by general banks in DKI Jakarta from January to November 2019 amounted to Rp1,673.89 trillion. The business sector with the highest UMKM credit value in DKI Jakarta was Wholesale and Retail Trade, Repair of Motor Vehicles and Motorcycles, reaching Rp652.65 trillion. Meanwhile, the business sector of Government Administration and Mandatory Social Security had the lowest credit value, at Rp4.74 trillion.

(Read More: [How Much Bank Credit Allocation for MSMEs?](https://databoks.katadata.co.id/datapublish/2017/10/03/berapa-alokasi-kredit-perbankan-untuk-umkm))

According to Law No. 20 of 2008 concerning MSMEs, the definition of UMKM credit is based on the ceiling: (i) microcredit with a ceiling up to Rp50 million, (ii) small credit with a ceiling of more than Rp50 million up to Rp500 million, and (iii) medium credit with a ceiling of more than Rp500 million up to Rp5 billion.

MSMEs are the backbone of the Indonesian economy, proven by their resilience during economic crises, contributing 60% of GDP (2019), and absorbing 117 million workers (2018). Therefore, credit assistance is considered crucial for the continued growth and productivity of MSMEs, especially during a pandemic. To this end, the government provides several UMKM credit assistance programs to the public, such as Small Investment Credit (KIK), Permanent Working Capital Credit (KMKP), Productive Financing for Micro Business Credit (P3-KUM), People's Business Credit (KUR), and Ultra Micro Credit (UMI).

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