Indonesia Launches Women's Credit Program With 8% Flat Interest Rate

Indonesia has introduced a new credit program designed to empower women from economically vulnerable families, offering financing at a significantly reduced flat interest rate of 8 percent annually.

The Kredit Perempuan Prasejahtera (KPPS) program, detailed in a new regulation enacted on August 5, 2026, provides productive financing for women who are already running or planning to start businesses. Eligible recipients can secure loans of up to Rp15 million (approximately $925) per agreement, with no requirement for additional collateral.

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The issuance of this regulation follows President Prabowo Subianto’s directive to significantly reduce the financing burden for the most vulnerable groups. It also follows up on the outcome of the MSME Financing Policy Committee’s coordination meeting on June 22, 2026.

Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the regulation fulfills President Prabowo Subianto's directive to lessen the financial burden on the most vulnerable groups. Previously, ultra-micro business owners, especially women in challenging economic situations, often faced interest rates as high as 24 percent per year. The KPPS program aims to cut this interest burden through government subsidies.

The program seeks to expand access to productive credit for women, foster business creation and job growth, and contribute to overall economic expansion. It targets women identified through the National Single Socioeconomic Data system, specifically those in the lowest four deciles of socioeconomic status. Applicants must also possess a national identification number and family card, and be part of a group of at least five members residing in the same area. Hartarto emphasized that lenders will assess eligibility objectively to ensure no potential beneficiary is overlooked.

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To ensure that no prospective beneficiary is left behind, the regulation also allows lenders to objectively assess applicants’ eligibility based on the applicable criteria.