OJK Regulation No. 19 of 2025 on Facilitating Financing Access for Micro, Small, and Medium Enterprises

COPY
FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 19 OF 2025
ON
FACILITATING FINANCING ACCESS FOR MICRO, SMALL, AND MEDIUM ENTERPRISES BY THE GRACE OF THE ONE AND ONLY GOD

THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY,

Considering: that in order to implement the provisions of Article 249 paragraph (3) of Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector, it is necessary to establish a Financial Services Authority Regulation concerning Facilitating Financing Access for Micro, Small, and Medium Enterprises;

Recalling: 1. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253) as amended by Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);
2. Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector (State Gazette of the Republic of Indonesia Year 2023 Number 4, Supplement to the State Gazette of the Republic of Indonesia Number 6845);

DECIDING:

To establish: A FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING FACILITATING FINANCING ACCESS FOR MICRO, SMALL, AND MEDIUM ENTERPRISES.

CHAPTER I
GENERAL PROVISIONS

Article 1
In this Financial Services Authority Regulation, the following terms are defined as:

1. Financial Institution, hereinafter abbreviated as FI, is an institution that conducts activities in the banking, capital market, insurance, pension fund, venture capital, microfinance institution, financing company, and other financial service sectors.
2. Bank is a bank as referred to in the laws concerning banking and laws concerning Sharia banking.
3. Non-Bank Financial Institution, hereinafter abbreviated as NBFI, is an FI other than a Bank, which has business activities in the distribution or provision of funds.
4. Micro, Small, and Medium Enterprises, hereinafter abbreviated as MSMEs, are productive economic activities conducted by individuals or business entities that meet the criteria for micro, small, and medium enterprises as regulated in legislation concerning micro, small, and medium enterprises.
5. Financing is the provision of funds by Banks and/or NBFI, which is conventional or based on Sharia principles.
6. Facilitating MSME Financing Access is an activity conducted by Banks and/or NBFI to encourage the increase of MSME access to obtain easier Financing.

CHAPTER II
FINANCING ACCESS FOR MSMEs

Article 2
(1) Facilitating MSME Financing Access must be conducted by Banks and NBFI.
(2) Banks as referred to in paragraph (1) include:
a. commercial banks; and b. people's economy banks, which conduct activities conventionally or based on Sharia principles.
(3) NBFI as referred to in paragraph (1) include:
a. financing companies; b. venture capital companies;
c. microfinance institutions;
d. providers of technology-based crowdfunding services; e. pawnshop companies; and f. other NBFI, which conduct activities conventionally or based on Sharia principles.

Article 3
(1) The Financial Services Authority supports the development and empowerment of MSMEs to increase access to Financing from Banks and NBFI to MSMEs.
(2) To support the development and empowerment of MSMEs as referred to in paragraph (1), the Financial Services Authority:
a. manages and analyzes data related to Financing to MSMEs; b. formulates and reviews Financing policies for MSMEs;
c. provides MSME policy recommendations; and/or
d. coordinates with ministries, agencies, and/or other parties.
(3) The Financial Services Authority encourages FIs to play an active role in supporting the implementation of MSME development and empowerment.

Article 4
(1) Facilitating MSME Financing Access as referred to in Article 2 paragraph (1) is conducted in the form of Financing distribution through:
a. the establishment of special policies in Financing to MSMEs; b. the formulation of special Financing schemes for MSMEs;
c. the acceleration of business processes in the distribution of Financing to MSMEs;
d. the establishment of costs related to Financing to MSMEs charged fairly; and/or e. other forms of facilitation.
(2) Banks and NBFI may cooperate in providing Facilitating MSME Financing Access as referred to in Article 2 paragraph (1).

Article 5
(1) Banks or NBFI that violate the provisions as referred to in Article 2 paragraph (1) are subject to administrative sanctions in the form of written reprimands or written warnings.
(2) In the event that a Bank or NBFI has been subject to administrative sanctions in the form of written reprimands or written warnings as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 2 paragraph (1), the Bank or NBFI is subject to administrative sanctions in the form of:
a. prohibition on issuing products or conducting new activities; b. restriction on business activities;
c. suspension of certain business activities; and/or
d. downgrade of the health level assessment results.

CHAPTER III
GOVERNANCE, RISK MANAGEMENT,
AND FINANCING PLANS FOR MSMEs

First Section
Governance in Providing Facilitating MSME Financing Access

Article 6
(1) Banks and NBFI must establish clear duties and responsibilities of:
a. the Board of Directors; b. the Board of Commissioners; and
c. the Sharia Supervisory Board for Banks and NBFI conducting business activities based on Sharia principles,
in providing Facilitating MSME Financing Access.
(2) The duties and responsibilities of the Board of Directors as referred to in paragraph (1) letter a must at least establish:
a. a strategic plan for providing Facilitating MSME Financing Access adjusted to capital support, human resources, and supporting infrastructure; and b. policies and procedures for all business processes of providing Facilitating MSME Financing Access, which must at least contain:

1. prudential principles in Financing to MSMEs;
2. Financing approval policies for MSMEs;
3. documentation and administration of Financing to MSMEs;
4. supervision of Financing to MSMEs; and
5. resolution of problematic Financing to MSMEs.
   (3) Banks and NBFI must conduct review and re-evaluation of policies and procedures as referred to in paragraph (2) letter b at least 1 (one) time within a period of 3 (three) years.
   (4) The duties and responsibilities of the Board of Commissioners as referred to in paragraph (1) letter b must at least direct and monitor:
   a. the strategic plan for providing Facilitating MSME Financing Access; and b. the implementation of governance in providing Facilitating MSME Financing Access.
   (5) The duties and responsibilities of the Sharia Supervisory Board as referred to in paragraph (1) letter c must at least:
   a. evaluate policies and procedures established in providing Financing to MSMEs in accordance with Sharia principles; and b. direct and monitor the implementation of Sharia governance in providing Facilitating MSME Financing Access.

Article 7
(1) Banks and NBFI must have a unit or function tasked with handling the provision of Facilitating MSME Financing Access, in accordance with the scale and complexity of the Bank and NBFI. (2) The unit or function as referred to in paragraph (1) may be held concurrently by other units or functions in Banks and NBFI. (3) The concurrent holding of units or functions as referred to in paragraph (2) follows regulations governing the concurrent holding of units or functions in each respective Bank and NBFI.

Second Section
Risk Management in Providing Facilitating MSME Financing Access

Article 8
(1) Banks and NBFI that already have obligations to implement risk management must apply risk management in providing Facilitating MSME Financing Access in accordance with Financial Services Authority Regulations concerning the implementation of risk management, for each respective Bank and NBFI. (2) NBFI that do not yet have obligations to implement risk management as referred to in paragraph (1) must apply risk management in providing Facilitating MSME Financing Access at least containing strengthening of aspects:
a. active supervision by the Board of Directors, Board of Commissioners, and Sharia Supervisory Board; b. adequacy of risk management policies and procedures and the establishment of risk limits;
c. adequacy of risk identification, measurement, monitoring, and control processes, as well as risk management information systems; and
d. comprehensive internal control systems.
(3) Banks or NBFI that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in accordance with Financial Services Authority Regulations concerning the implementation of risk management, for each respective Bank and NBFI.

Third Section
Financing Plans for MSMEs

Article 9
(1) Banks and NBFI must submit plans for the distribution of Financing to MSMEs in their business plans.
(2) Banks and NBFI must submit reports on the realization of the Financing distribution plans for MSMEs as referred to in paragraph (1), in the business plan realization reports.
(3) The procedures and mechanisms for submitting Financing distribution plans for MSMEs as referred to in paragraph (1) and realization reports as referred to in paragraph (2) are implemented in accordance with Financial Services Authority Regulations concerning business plans, for each respective Bank and NBFI. (4) The obligations as referred to in paragraph (1) and paragraph (2) are exempted for NBFI that do not yet have obligations to submit business plans in accordance with Financial Services Authority Regulations concerning business plans for non-bank financial institutions. (5) Banks or NBFI that violate the provisions as referred to in paragraph (1) and/or paragraph (2) are subject to administrative sanctions in accordance with Financial Services Authority Regulations concerning business plans, for each respective Bank and NBFI.

Fourth Section
Administrative Sanctions

Article 10
(1) Banks or NBFI that violate the provisions as referred to in Article 6, Article 7 paragraph (1), and/or Article 8 paragraph (2) are subject to administrative sanctions in the form of written reprimands or written warnings. (2) In the event that a Bank or NBFI has been subject to administrative sanctions in the form of written reprimands or written warnings as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 6, Article 7 paragraph (1), and/or Article 8 paragraph (2), the Bank or NBFI is subject to administrative sanctions in the form of:
a. prohibition on issuing products or conducting new activities; b. restriction on business activities;
c. suspension of certain business activities; and/or
d. downgrade of the health level assessment results.

CHAPTER IV
FORMS OF FACILITATING MSME FINANCING ACCESS

First Section
General

Article 11
(1) Facilitating MSME Financing Access is conducted by applying the principles of ease, accuracy, speed, affordability, and inclusiveness.
(2) In providing Facilitating MSME Financing Access in accordance with the principles as referred to in paragraph (1), Banks and NBFI:
a. establish the risk level to be taken (risk appetite) and risk tolerance; and b. consider:

1. the scale and complexity of the Bank and NBFI business; and
2. the human resource capabilities possessed by the Bank and NBFI.

Second Section
Establishment of Special Policies in Financing to MSMEs

Article 12
(1) Banks and NBFI establish special policies in Financing to MSMEs as referred to in Article 4 paragraph (1) letter a.
(2) Special policies as referred to in paragraph (1) may include:
a. simplification of requirements in the distribution of Financing to MSMEs; and/or b. the establishment of special criteria in the feasibility assessment of Financing distribution for MSME customers/debtors or prospective customers/debtors.

Third Section
Formulation of Special Schemes in Financing to MSMEs

Article 13
(1) In providing Facilitating MSME Financing Access, Banks and NBFI formulate special schemes for the distribution of Financing to MSMEs as referred to in Article 4 paragraph (1) letter b, adjusted to the business characteristics and/or business cycles of MSMEs. (2) In formulating special schemes as referred to in paragraph (1), Banks and NBFI may accept collateral in the form of intellectual property, implemented in accordance with legislation. (3) The provision of Financing with special schemes as referred to in paragraph (1) is implemented in accordance with Financial Services Authority Regulations concerning the provision of products for Banks or Financial Services Authority Regulations concerning the provision of business for NBFI.

Fourth Section
Acceleration of Business Processes in Financing Distribution to MSMEs

Article 14
(1) Banks and NBFI accelerate the business processes of distributing Financing to MSMEs as referred to in Article 4 paragraph (1) letter c through:
a. simplification of approval levels for Financing applications from MSME customers/debtors and/or prospective customers/debtors; and/or b. the development of Financing assessment methods. (2) In addition to being conducted independently by Banks and NBFI, the development of Financing assessment methods as referred to in paragraph (1) letter b may be conducted by Banks and NBFI through cooperation with third parties. (3) Banks and NBFI that develop Financing assessment methods through cooperation with third parties as referred to in paragraph (2) must ensure that the third party has been licensed by the Financial Services Authority or other competent authority in accordance with legislation. (4) Banks and NBFI that develop Financing assessment methods as referred to in paragraph (1) letter b must conduct periodic reviews and re-evaluations of the reliability of the Financing assessment methods, at least 1 (one) time within a period of 3 (three) years.

Article 15
(1) Banks and NBFI that develop Financing assessment methods as referred to in Article 14 paragraph (1) letter b may use information technology systems provided independently or through cooperation with information technology service providers. (2) The use of information technology systems as referred to in paragraph (1) is implemented in accordance with Financial Services Authority Regulations concerning the provision of information technology for Banks or Financial Services Authority Regulations concerning risk management in the use of information technology for NBFI.

Fifth Section
Establishment of Costs Related to Financing to MSMEs

Article 16
(1) Banks and NBFI must evaluate the fairness of the determination of costs related to Financing to MSMEs as referred to in Article 4 paragraph (1) letter d charged to MSME customers/debtors and/or prospective customers/debtors, periodically at least 1 (one) time within a period of 3 (three) months. (2) In conducting the evaluation as referred to in paragraph (1), Banks and NBFI must have policies and procedures for conducting the evaluation. (3) Policies and procedures in conducting the evaluation as referred to in paragraph (2) must at least contain:
a. procedures for evaluating the fairness of costs related to Financing to MSMEs; b. evaluation of funding cost sources and components of costs related to Financing to MSMEs; and
c. impact analysis of changes in costs related to Financing to MSMEs.
(4) Banks and NBFI adjust the establishment of costs related to Financing to MSMEs charged to MSME customers/debtors and/or prospective customers/debtors based on the evaluation results as referred to in paragraph (1).

Sixth Section
Administrative Sanctions

Article 17
(1) Banks or NBFI that violate the provisions as referred to in Article 14 paragraph (3), paragraph (4), Article 16 paragraph (1), paragraph (2), and/or paragraph (3) are subject to administrative sanctions in the form of written reprimands or written warnings. (2) In the event that a Bank or NBFI has been subject to administrative sanctions in the form of written reprimands or written warnings as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 14 paragraph (3), paragraph (4), Article 16 paragraph (1), paragraph (2), and/or paragraph (3), the Bank or NBFI is subject to administrative sanctions in the form of:
a. prohibition on issuing products or conducting new activities; b. restriction on business activities;
c. suspension of certain business activities; and/or
d. downgrade of the health level assessment results.

CHAPTER V
HUMAN RESOURCE COMPETENCY DEVELOPMENT
AT BANKS AND NBFI

Article 18
(1) Banks and NBFI must implement internal human resource competency development programs for Banks and NBFI to increase Facilitating MSME Financing Access, at least 1 (one) time within a period of 1 (one) year. (2) The implementation of internal human resource competency development programs for Banks and NBFI as referred to in paragraph (1) is conducted while still observing Financial Services Authority Regulations concerning human resource quality development, for each respective Bank and NBFI.

Article 19
(1) Banks or NBFI that violate the provisions as referred to in Article 18 paragraph (1) are subject to administrative sanctions in the form of written reprimands or written warnings. (2) In the event that a Bank or NBFI has been subject to administrative sanctions in the form of written reprimands or written warnings as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 18 paragraph (1), the Bank or NBFI is subject to administrative sanctions in the form of:
a. prohibition on issuing products or conducting new activities; b. restriction on business activities;
c. suspension of certain business activities; and/or
d. downgrade of the health level assessment results.

CHAPTER VI
PARTNERSHIP IN PROVIDING FACILITATING MSME FINANCING ACCESS BY BANKS AND NBFI

Article 20
(1) Banks and NBFI may cooperate with partners that support the provision of Facilitating MSME Financing Access.
(2) Partners of Banks and NBFI as referred to in paragraph (1) are:
a. FIs in the form of:

1. guarantee companies; and/or
2. insurance companies,
   which conduct activities conventionally or based on Sharia principles; b. crowdfunding service providers;
   c. financial sector technology innovation providers; and/or
   d. other parties.
   (3) Banks and NBFI must ensure that partners as referred to in paragraph (2) are registered or licensed by the Financial Services Authority or other competent authority.
   (4) To support the provision of Facilitating MSME Financing Access by Banks and NBFI, partners as referred to in paragraph (2) letters a, b, and c may provide certain facilitation facilities while still observing prudential principles.

Article 21
(1) In implementing cooperation with partners as referred to in Article 20, Banks and NBFI must have a cooperation agreement.
(2) The cooperation agreement as referred to in paragraph (1) must at least contain:
a. rights and obligations; b. scope of cooperation;
c. duration of cooperation;
d. conditions and procedures for changing the cooperation agreement; e. mechanism for terminating cooperation; f. dispute resolution methods; and g. mechanism for payment of subrogated claim recovery results, for Banks and NBFI that cooperate with FI partners in the form of guarantee companies and/or insurance companies as referred to in Article 20 paragraph (2) letter a.

Article 22
(1) Banks or NBFI that violate the provisions as referred to in Article 20 paragraph (3) and/or Article 21 are subject to administrative sanctions in the form of written reprimands or written warnings. (2) In the event that a Bank or NBFI has been subject to administrative sanctions in the form of written reprimands or written warnings as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 20 paragraph (3) and/or Article 21, the Bank or NBFI is subject to administrative sanctions in the form of:
a. prohibition on issuing products or conducting new activities; b. restriction on business activities;
c. suspension of certain business activities; and/or
d. downgrade of the health level assessment results.

CHAPTER VII
UTILIZATION OF INFORMATION TECHNOLOGY TO ENCOURAGE THE MSME FINANCING DIGITAL ECOSYSTEM

Article 23
(1) Banks and NBFI may utilize information technology to encourage the digital ecosystem in Financing to MSMEs.
(2) Banks and NBFI that utilize information technology as referred to in paragraph (1) must provide information related to the use of information technology to MSMEs as users of information technology. (3) The utilization of information technology as referred to in paragraph (1) and paragraph (2) is implemented in accordance with Financial Services Authority Regulations concerning the provision of information technology for Banks or Financial Services Authority Regulations concerning risk management in the use of information technology for NBFI. (4) Banks or NBFI that violate the provisions as referred to in paragraph (2) are subject to administrative sanctions in the form of written reprimands or written warnings.

CHAPTER VIII
WRITE-OFF AND DEBT WRITE-OFF FOR MSME FINANCING

Article 24
(1) To support the smooth provision of Facilitating MSME Financing Access, Banks and NBFI may conduct write-off and/or debt write-off on non-performing loans.
(2) Banks and NBFI that conduct write-off and/or debt write-off on non-performing loans as referred to in paragraph (1) must administer data and information regarding Financing to MSMEs that have undergone write-off and/or debt write-off. (3) Write-off and/or debt write-off of Financing to MSMEs as referred to in paragraph (1) is conducted by Banks and NBFI in accordance with legislation.

Article 25
(1) Banks or NBFI that violate the provisions as referred to in Article 24 paragraph (2) are subject to administrative sanctions in the form of written reprimands or written warnings. (2) In the event that a Bank or NBFI has been subject to administrative sanctions in the form of written reprimands or written warnings as referred to in paragraph (1) and continues to violate the provisions as referred to in Article 24 paragraph (2), the Bank or NBFI is subject to administrative sanctions in the form of:
a. prohibition on issuing products or conducting new activities; b. restriction on business activities;
c. suspension of certain business activities; and/or
d. downgrade of the health level assessment results.

CHAPTER IX
FINANCIAL LITERACY AND CONSUMER PROTECTION
FOR MSME ACTORS

Article 26
(1) Banks and NBFI must conduct activities to increase financial literacy in the form of financial education for MSME actors in accordance with Financial Services Authority Regulations concerning the improvement of financial literacy and inclusion for consumers and the public. (2) Banks or NBFI that violate the provisions as referred to in paragraph (1) are subject to administrative sanctions in accordance with Financial Services Authority Regulations concerning the improvement of financial literacy and inclusion for consumers and the public.

Article 27
Banks and NBFI that provide Facilitating MSME Financing Access apply consumer protection in accordance with legislation concerning consumer and public protection in the financial services sector.

CHAPTER X
INCENTIVES FOR BANKS AND NON-BANK FINANCIAL INSTITUTIONS
Article 28
(1) General Banks as referred to in Article 2 paragraph (2) letter a may conduct the development of advanced banking products based on information technology to provide MSME Financing Access Facilitation. (2) In conducting the development of advanced banking products based on information technology as referred to in paragraph (1), general banks must possess adequate information technology infrastructure and information technology infrastructure management. (3) General Banks that meet the provisions as referred to in paragraph (2) may submit an application for permission in the form of notification regarding the plan to organize new advanced banking products to the Financial Services Authority. (4) Except for the provisions regarding the requirement to have information technology infrastructure and information technology infrastructure management as referred to in paragraph (2), the mechanism for organizing the development of advanced banking products based on information technology is implemented in accordance with Financial Services Authority Regulations regarding the organization of general bank products.

Article 29
(1) Rural Economy Banks as referred to in Article 2 paragraph (1) letter b may open special financial centers with activities consisting of fund disbursement services to MSMEs to support MSME Financing Access Facilitation. (2) Rural Economy Banks that will open special financial centers as referred to in paragraph (1) must submit an application for permission to open special financial centers to the Financial Services Authority by only attaching documents proving operational readiness in accordance with Financial Services Authority Regulations regarding rural economy banks and Shariah rural economy banks. (3) The Financial Services Authority provides approval or rejection of the application for permission to open special financial centers as referred to in paragraph (2), at most 10 (ten) working days after the documents are received completely. (4) Except for the provisions regarding:
a. documents proving operational readiness as referred to in paragraph (2); and b. the time limit for providing approval or rejection of the application for permission to open special financial centers as referred to in paragraph (3), the procedures and requirements for opening special financial centers with activities consisting of fund disbursement services to MSMEs are implemented in accordance with Financial Services Authority Regulations regarding rural economy banks and Shariah rural economy banks.

Article 30
(1) The Financial Services Authority may provide easing of requirements to Non-Bank Financial Institutions in obtaining approval to carry out other business activities that support the MSME sector, based on certain considerations. (2) The provision of easing of requirements to Non-Bank Financial Institutions as referred to in paragraph (1) is carried out while still considering the fulfillment of prudential principles and adequacy in the application of risk management.

Article 31
The Financial Services Authority may conduct a review of licenses or approvals that have been given with incentives as referred to in Article 28, Article 29, or Article 30, if there is a mismatch in the implementation of the license or approval in accordance with statutory regulations.

CHAPTER XI
TRANSITIONAL PROVISIONS
Article 32
At the time this Financial Services Authority Regulation comes into force, Banks and Non-Bank Financial Institutions that:
a. do not yet have policies and procedures for organizing MSME Financing Access Facilitation must formulate policies and procedures in accordance with the provisions in this Financial Services Authority Regulation; b. already have policies and procedures for organizing MSME Financing Access Facilitation must adjust to the provisions in this Financial Services Authority Regulation; and/or
c. do not yet have units or functions responsible for handling MSME Financing Access Facilitation must have the aforementioned units or functions, at most 4 (four) months calculated from the effective date of this Financial Services Authority Regulation.

Article 33
For Banks and Non-Bank Financial Institutions that do not yet have plans for MSME Financing disbursement in their business plans, the MSME Financing disbursement plan as referred to in Article 9 paragraph (1) shall be submitted for the first time to the Financial Services Authority for the 2026 business plan or change of business plan.

This copy is in accordance with the original
Head of Legal Development Directorate
Legal Department signed
Aat Windradi

CHAPTER XII
CLOSING PROVISIONS
Article 34
This Financial Services Authority Regulation comes into force 2 (two) months after the date of its promulgation.
To ensure that everyone knows it, order the promulgation of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on August 28, 2025
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signature
MAHENDRA SIREGAR
Promulgated in Jakarta on September 2, 2025
MINISTER OF LAW OF THE REPUBLIC OF INDONESIA, signature SUPRATMAN ANDI AGTAS STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2025 NUMBER 27/OJK

EXPLANATION
OF
THE FINANCIAL SERVICES AUTHORITY REGULATION
OF THE REPUBLIC OF INDONESIA
NUMBER 19 OF 2025
CONCERNING
FACILITATING FINANCING ACCESS TO MICRO, SMALL, AND MEDIUM ENTERPRISES

I. GENERAL
In response to the mandate in Law Number 4 of 2023 concerning the Development and Strengthening of the Financial Sector regarding regulations on MSME Financing Access Facilitation, this regulation is expected to become the foundation for Banks and Non-Bank Financial Institutions in providing MSME Financing Access Facilitation while still paying attention to prudential principles, so that Banks and Non-Bank Financial Institutions as well as MSME actors can continue to synergize to strengthen national economic resilience. The financial services sector in Indonesia is one of the sectors that plays an important role in driving the increase of the national economy and community economy. The financial services sector is required to always be competitive in order to drive economic growth. Forms of contribution of the financial services sector include among others through support and empowerment of MSMEs. MSMEs are one of the driving wheels of the economy that can absorb and create new jobs. Support for MSMEs needs to be carried out through the provision of MSME Financing Access Facilitation so that MSMEs can increase the scale of their business. Empowerment of MSMEs also needs to be increased so as to drive collaboration and connectivity between MSMEs and large-scale industries. The significant role of MSMEs in the community economy needs to be balanced with support from Banks and Non-Bank Financial Institutions in the form of determining strategies to provide MSME Financing Access Facilitation. Adaptation of strategies by Banks and Non-Bank Financial Institutions becomes an important matter in meeting the needs and characteristics that differ for each segment of MSMEs. Strategies of Banks and Non-Bank Financial Institutions include among others through the development of products and services that not only take into account the scale of business, but also consider the level of risk, capital needs, and types of financial services that are most suitable. Banks and Non-Bank Financial Institutions need to present innovative approaches to provide financial solutions according to the needs of each segment of MSMEs, starting from the micro business scale, including ultra-micro, which require quick and easy access, up to the small and medium scale which requires more complex and diverse services. By carrying out this strategy adaptation, Banks and Non-Bank Financial Institutions can provide more effective solutions for MSMEs in facing challenges and taking advantage of opportunities to continue to grow sustainably. Based on the above, there is a need for principle-based regulations regarding the application of adequate governance accompanied by effective risk management on Banks and Non-Bank Financial Institutions in providing MSME Financing Access Facilitation. Various forms of MSME Financing Access Facilitation are expected to be able to answer challenges related to MSME capital needs, including financial education and the application of consumer protection
aspects to MSME actors.

II. ARTICLE BY ARTICLE EXPLANATION
Article 1
It is clear enough.

Article 2
Paragraph (1)
MSMEs include ultra-micro businesses within them.
Paragraph (2)
Letter a
What is meant by "general bank" is a bank that in its activities provides services in payment circulation, including branch offices of banks located outside the country and Shariah business units. Letter b What is meant by "rural economy bank" is a bank that in its activities does not directly provide services in giro circulation. Paragraph (3) Letter a What is meant by "financing company" is a business entity that carries out financing activities for goods and/or services. Letter b What is meant by "venture capital company" is a business entity that carries out financing activities through capital participation and/or financing for a certain period of time in the context of business development for partner businesses or debtors. Letter c What is meant by "microfinance institution" is a financial institution specifically established to provide business development services and community empowerment, either through loans or financing in micro-scale businesses to members and the public, savings management, or the provision of business development consulting services that are not solely profit-seeking. Letter d What is meant by "information technology-based co-financing service provider" is an Indonesian legal entity that provides, manages, and operates the organization of financial service offerings to bring together fund providers with fund recipients in conducting conventional financing or based on Shariah principles directly through electronic systems using the internet. Letter e What is meant by "pawnshop company" is a legal entity that carries out business activities providing loans secured by movable assets. Letter f What is meant by "other Non-Bank Financial Institutions" are Non-Bank Financial Institutions that disburse Financing to MSMEs including among others:

1. Indonesia Export Financing Institution; and
2. PT Permodalan Nasional Madani.

Article 3
Paragraph (1)
Forms of support for the development and empowerment of MSMEs include among others increasing access to financial services for MSMEs, organizing empowerment programs for MSME actors through financial literacy, and drafting regulations that support ease for MSMEs. Paragraph (2) Letter a It is clear enough. Letter b It is clear enough. Letter c It is clear enough. Letter d What is meant by "other parties" includes among others business actor organizations. Paragraph (3) The active role of Financial Institutions in supporting the implementation of the development and empowerment of MSMEs is carried out among others through participation in literacy programs, including mentoring, to MSME actors conducted by the Financial Services Authority.

Article 4
Paragraph (1)
Letter a
It is clear enough.
Letter b
It is clear enough.
Letter c
It is clear enough.
Letter d
What is meant by "costs related to Financing to MSMEs" include among others:

1. interest rates/margins/profit sharing/ujrah; and
2. costs:
   a) administration; b) commissions; c) insurance or premiums; d) guarantees or guarantee remuneration; e) agreements and notaries; and/or f) other costs charged to customers/debtors or prospective customers/debtors. Letter e What is meant by "other forms of facilitation" are forms of facilitation organized or initiated by authorities and/or governments including among others financing scheme programs for MSME actors with fast processes and low costs. Paragraph (2) Forms of cooperation in providing MSME Financing Access Facilitation implemented between Banks, between Non-Bank Financial Institutions, and/or between Banks and Non-Bank Financial Institutions, namely through cooperation in the disbursement of Financing to MSMEs, including among others:
   a. disbursement of Financing between general banks and rural economy banks through executing cooperation schemes; b. disbursement of productive Financing between general banks and venture capital companies to be disbursed to MSMEs;
   c. disbursement of Financing by rural economy banks or financing companies through channeling cooperation schemes with information technology-based co-financing service providers that focus on the development of MSME businesses located in remote areas; and
   d. disbursement of productive Financing by financing companies to MSMEs.

Article 5
It is clear enough.

Article 6
Paragraph (1)
Letter a
What is meant by "Board of Directors" is the organ of Banks and Non-Bank Financial Institutions authorized and fully responsible for the management of Banks and Non-Bank Financial Institutions for the interests of Banks and Non-Bank Financial Institutions, in accordance with the purpose and objectives of Banks and Non-Bank Financial Institutions and representing Banks and Non-Bank Financial Institutions, both inside and outside court in accordance with the articles of association for Banks and Non-Bank Financial Institutions in the form of limited liability companies or organs or equivalent parties for Banks and Non-Bank Financial Institutions with legal entity forms other than limited liability companies. Letter b What is meant by "Board of Commissioners" is the organ of Banks and Non-Bank Financial Institutions tasked with carrying out general and/or specific supervision and giving advice to the Board of Directors in accordance with the articles of association for Banks and Non-Bank Financial Institutions in the form of limited liability companies or organs or equivalent parties for Banks and Non-Bank Financial Institutions with legal entity forms other than limited liability companies. Letter c What is meant by "Sharia Supervisory Board" is a party that has supervisory tasks and functions regarding the organization of activities of Banks and Non-Bank Financial Institutions that carry out business activities based on Shariah principles and conventional Banks and Non-Bank Financial Institutions that have Shariah business units to comply with Shariah principles. Paragraph (2) Letter a Strategic plans for providing MSME Financing Access Facilitation include among others determining:

1. criteria for MSMEs to be financed (individuals or business entities);
2. target economic sectors aimed at; and
3. plans for the development of financing products adjusted to target economic sectors.
   Number 1
   It is clear enough.
   Number 2
   It is clear enough.
   Number 3
   It is clear enough.
   Number 4
   It is clear enough.
   Number 5
   Settlement of Problematic Financing to MSMEs includes among others restructuring, write-off, and forgiveness of debt.
   Paragraph (3)
   It is clear enough.
   Paragraph (4)
   It is clear enough.
   Paragraph (5)
   It is clear enough.

Article 7
Paragraph (1)
It is clear enough.
Paragraph (2)
It is clear enough.
Paragraph (3)
Provisions regulating the overlapping of units or functions include among others:
a. Financial Services Authority Regulation regarding the application of governance for general banks. b. Financial Services Authority Regulation regarding the application of governance for rural economy banks and Shariah rural economy banks.
c. Financial Services Authority Regulation regarding the application of governance for each respective Non-Bank Financial Institution.

Article 8
Paragraph (1)
Forms of risk management application in providing MSME Financing Access Facilitation, among others Banks and Non-Bank Financial Institutions carry out processes:
a. identification of risks related to Financing to MSMEs in accordance with MSME Financing products; b. measurement of risk through periodic evaluation of MSME Financing performance (such as Financing growth and nonperforming loan/nonperforming financing rates), including programs for providing MSME Financing Access Facilitation;
c. monitoring of risk through documentation of monitoring of MSME Financing disbursement and MSME debtor performance and evaluation of risk exposure related to Financing to MSMEs;
d. control of risk through the application of risk mitigation methods including among others the use of Financing guarantees/insurance; and e. internal control through the application of the four eyes principle in the disbursement of Financing to MSMEs. Paragraph (2) Letter a Active supervision by the Board of Directors, Board of Commissioners, and Shariah Supervisory Board is supervision carried out by the Board of Directors, Board of Commissioners, and Shariah Supervisory Board in accordance with their duties and responsibilities. Letter b Risk management policies and procedures as well as the determination of risk limits include among others the determination of risk, the determination of the level of risk to be taken (risk appetite), the determination of risk tolerance (risk tolerance), and the determination of risk limits on risks related to the provision of MSME Financing Access Facilitation. Letter c See explanation of paragraph (1). Letter d Comprehensive internal control systems include among others the disbursement of Financing to MSMEs is carried out in accordance with established policies and procedures. Paragraph (3) It is clear enough.

Article 9
Paragraph (1)
MSME Financing Plans include among others the nominal amount of Financing to be provided to MSMEs, the ratio of total MSME Financing to total Financing, and forms of cooperation in the disbursement of Financing to MSMEs between Banks and Non-Bank Financial Institutions. Paragraph (2) It is clear enough. Paragraph (3) For general banks, submission is in accordance with Financial Services Authority Regulations regarding general bank business plans and their implementing provisions. For rural economy banks, submission is in accordance with Financial Services Authority Regulations regarding rural credit bank and Shariah rural financing bank business plans and their implementing provisions. For Non-Bank Financial Institutions, submission is in accordance with Financial Services Authority Regulations regarding non-bank financial services institution business plans and their implementing provisions, for each respective Non-Bank Financial Institution. Paragraph (4) It is clear enough. Paragraph (5) It is clear enough.

Article 10
It is clear enough.

Article 11
Paragraph (1)
What is meant by "easy" is simpler requirements and processes for MSMEs to obtain Financing access.
What is meant by "right" is the provision of Financing to MSMEs adjusted to the targets and needs of MSME actors.
What is meant by "fast" is the disbursement of Financing to MSMEs with business processes in a shorter time.
What is meant by "cheap" is the setting of costs related to Financing to MSMEs charged fairly.
What is meant by "inclusive" is Financing to MSMEs that reaches all segments of MSMEs without regard to differences, including women and persons with disabilities.
Paragraph (2)
It is clear enough.

Article 12
Paragraph (1)
It is clear enough.
Paragraph (2)
Letter a
Simplification of requirements in the disbursement of Financing to MSMEs is carried out among others by setting Financing disbursement requirements that are easier compared to Financing to non-MSMEs. Letter b Setting of special criteria in feasibility assessment to provide MSME Financing Access Facilitation includes among others:

1. In order to encourage the development of the economy in the manufacturing sector, JALAR general banks set special feasibility assessment policies for MSME actors who have businesses in the manufacturing sector by providing opportunities for Financing disbursement to prospective debtors who have previously had write-offs and/or debt forgiveness due to disasters on previous Financing facilities. Feasibility assessment for Financing disbursement is carried out while still paying attention to the business prospects conducted by the applicant, as well as in-depth analysis of the character, ability, and willingness of the debtor to repay; and
2. DANELI Financing Companies provide Financing to MSME actors who have previously had a track record of problematic Financing caused by late payment of annual fees on credit card facilities.

Article 13
Paragraph (1)
Special schemes for the disbursement of Financing to MSMEs include among others:
a. Adjustment of Payment Term with Harvest Cycle Financing in the agriculture, plantation, and/or livestock sectors where the payment of principal obligations and/or interest adjusts to the harvest cycle. b. Supply Chain Financing Financing carried out by Banks that also finance the entire ecosystem of the agriculture, plantation, livestock, manufacturing, and/or trade sectors, from upstream to downstream (off-taker or product buyers) of MSME products.
c. Project Financing
Project financing using work orders, purchase orders, or work agreement contracts as collateral. d. Financing to Specific Groups Financing provided to specific community groups, such as rattan craftswomen groups, located in a certain region with the aim of increasing MSME empowerment. e. Shariah Financing with Specific Schemes General banks that carry out activities based on Shariah principles can disburse Financing to MSMEs using investment schemes collected from investor customers (investment account holders) through Shariah Restricted Investment Account (SRIA) products or disburse Financing directly or indirectly to MSMEs using cash waqf schemes, including among others through Cash Waqf Linked Deposit (CWLD) products. Paragraph (2) What is meant by "intellectual property" is intellectual property in accordance with statutory regulations in the field of intellectual property. Acceptance of collateral in the form of intellectual property considers among others the availability of the intellectual property ecosystem, such as the availability of markets for the sale of collateral in the form of intellectual property and methods of valuation or assessment of intellectual property. Paragraph (3) What is meant by "organization" is the licensing or approval mechanism, including realization reporting. Financial Services Authority Regulations regarding the organization of products for Banks or Financial Services Authority Regulations regarding the organization of business for Non-Bank Financial Institutions include:
a. Financial Services Authority Regulations regarding the organization of general bank products, for general banks; b. Financial Services Authority Regulations regarding the organization of rural credit bank and Shariah rural financing bank products, for rural economy banks and Shariah rural economy banks; or
c. Financial Services Authority Regulations regarding the organization of Non-Bank Financial Institution business, for each respective Non-Bank Financial Institution.

Article 14
Paragraph (1)
Letter a
It is clear enough.
Letter b
Financing assessment methods are methods used by Banks and Non-Bank Financial Institutions to assess the feasibility of providing Financing to customers/debtors and/or prospective customers/debtors of MSMEs. Examples of Financing assessment methods include assessment of the 7P principle (purpose, personality, payment, party, prospect, profitability and protection) or assessment of the 5C principle (character, capacity, condition, capital, and collateral). Paragraph (2) What is meant by "third parties" includes among others alternative credit rating agencies and/or credit information management agencies. Paragraph (3) It is clear enough. Paragraph (4) It is clear enough.

Article 15
It is clear enough.

Article 16
Paragraph (1)
See explanation of Article 4 paragraph (1) letter d.
Evaluation of the setting of premium rates or guarantee remuneration is carried out by paying attention to the risk profile of each customer/debtor.
Paragraph (2)
It is clear enough.
Paragraph (3)
Letter a
The procedure for evaluating the fairness of costs related to Financing to MSMEs includes among others evaluations carried out in board of directors meeting agendas.
Letter b
Evaluation of the calculation of funding sources and cost components related to the disbursement of Financing to MSMEs

Among others, an evaluation of labor costs and/or provisioning costs for Financing in Default.

Letter c
Analysis of the impact of cost changes related to Financing on MSMEs, including the potential increase in the portfolio of Financing to MSMEs resulting from a decrease in costs related to Financing to MSMEs.

Paragraph (4)
Is clear enough.

Article 17
Is clear enough.

Article 18
Paragraph (1)
Human resource competency development programs for internal Bank and LKNB staff include:

1. training/workshops for Bank and LKNB employees handling Financing to MSMEs regarding methods for analyzing the disbursement of Financing to MSMEs in the processing industry sector;
2. increasing Bank and LKNB employees' understanding of specific economic sectors, for the formulation of special schemes for Financing to MSMEs; and
3. enhancing Bank and LKNB employees' competencies to conduct financial education for MSME actors.

Paragraph (2)
Is clear enough.

Article 19
Is clear enough.

Article 20
Paragraph (1)
Is clear enough.

Paragraph (2)
Letter a
Number 1
What is meant by "guarantee company" is a legal entity engaged in the financial sector with its main business activity being guarantee and sharia guarantee activities in accordance with Financial Services Authority Regulations regarding licensing and institutional structure of guarantee institutions.

Number 2
What is meant by "insurance company" is an insurance company and sharia insurance company in accordance with Financial Services Authority Regulations regarding the conduct of business by insurance companies, sharia insurance companies, reinsurance companies, and sharia reinsurance companies, which carry out insurance activities linked to Financing to MSMEs.

Letter b
What is meant by "crowdfunding service provider" is a crowdfunding service provider in accordance with Financial Services Authority Regulations regarding the offering of securities through crowdfunding services based on information technology.

Letter c
What is meant by "financial sector technology innovation provider" is a financial sector technology innovation provider in accordance with Financial Services Authority Regulations regarding the conduct of financial sector technology innovation.

Letter d
What is meant by "other party" includes, among others, debt collection service companies.

Paragraph (3)
Is clear enough.

Paragraph (4)
What is meant by "certain facilitations" includes, among others, simplification of insurance or guarantee closing requirements, simplification of administrative processes, and simplification of business processes.

Article 21
Paragraph (1)
Is clear enough.

Paragraph (2)
Letter a
Is clear enough.

Letter b
Is clear enough.

Letter c
Is clear enough.

Letter d
Is clear enough.

Letter e
Is clear enough.

Letter f
Is clear enough.

Letter g
The mechanism for payment of subrogated claim recovery results is carried out in accordance with Financial Services Authority Regulations regarding insurance products linked to credit or sharia financing and suretyship or sharia suretyship products, and Financial Services Authority Regulations regarding the conduct of business by guarantee institutions.

Article 22
Is clear enough.

Article 23
Paragraph (1)
The utilization of information technology to drive the digital ecosystem in Financing to MSMEs includes, among others:
a. development of financial recording applications for MSME actors who are customers/debtors and/or prospective customers/debtors, so as to facilitate Banks and LKNB in conducting analysis to disburse Financing; b. development of applications equipped with sales product features, sales recording, and services that provide various payment method features to help sell MSME products; and
c. development of applications supporting MSMEs in conducting exports by providing financial solution recommendations.

Paragraph (2)
What is meant by "providing information" is the provision of explanations regarding features, risks, and benefits of information technology.
Example:
Banks and LKNB that develop special financial recording applications for MSME actors provide explanations regarding the usage procedures, features, risks, and benefits of the said application to application users.

Paragraph (3)
Is clear enough.

Paragraph (4)
Is clear enough.

Article 24
Paragraph (1)
Is clear enough.

Paragraph (2)
Is clear enough.

Paragraph (3)
Regulatory provisions include, among others:
a. Law on the Development and Strengthening of the Financial Sector and its implementing regulations; and b. Financial Services Authority Regulations regarding asset quality assessment, for each Bank and LKNB.

Article 25
Is clear enough.

Article 26
Is clear enough.

Article 27
Regulatory provisions regarding consumer and community protection in the financial services sector include, among others:
a. Law on the Development and Strengthening of the Financial Sector; and b. Financial Services Authority Regulations regarding consumer and community protection in the financial services sector.

Article 28
Paragraph (1)
What is meant by "advanced banking products" is advanced banking products in accordance with Financial Services Authority Regulations regarding the conduct of general banking products.

Paragraph (2)
Adequate information technology infrastructure and management of information technology infrastructure management means that the information technology infrastructure and management of information technology infrastructure management have met Financial Services Authority Regulations regarding the conduct of information technology by general banks.

Paragraph (3)
License applications in the form of notification regarding the plan to conduct new advanced banking products, also known as instant approval, in accordance with Financial Services Authority Regulations regarding the conduct of general banking products. The requirement to have adequate information technology infrastructure and management of information technology infrastructure management is a form of licensing incentive from the Financial Services Authority. License applications can be submitted by general banks in the form of notification without meeting the criteria for assessing the quality of risk management implementation and the good corporate governance factor rating in accordance with Financial Services Authority Regulations regarding the conduct of general banking products.

Paragraph (4)
Is clear enough.

Article 29
Paragraph (1)
What is meant by "special financial center" is a special financial center in accordance with Financial Services Authority Regulations regarding people's economic banks and sharia people's economic banks.

Paragraph (2)
In submitting license applications, people's economic banks do not submit documents explaining business targets or financial projections for at least 12 (twelve) months as referred to in Financial Services Authority Regulations regarding people's economic banks and sharia people's economic banks.

Paragraph (3)
The granting of approval or rejection within a period of 10 (ten) working days is a licensing incentive from the Financial Services Authority for people's economic banks that open special financial centers with activities consisting of fund disbursement services to MSMEs.

Paragraph (4)
Is clear enough.

Article 30
Paragraph (1)
The provision of facilitations to LKNB from provisions regarding requirements to obtain approval to conduct other business activities regulated in Financial Services Authority Regulations is intended, among others, to support national policies including in the context of developing MSMEs. Examples of facilitations related to requirements in obtaining approval to conduct other business activities include:
a. capital requirements; b. requirements for documents of other business activities; and
c. health level requirements.

Paragraph (2)
Is clear enough.

Article 31
Examples of non-compliance in license implementation:
People's Economic Bank (BPR) NAEL has obtained a license to open a special financial center with activities consisting of fund disbursement services to MSMEs using licensing incentives in accordance with this Financial Services Authority Regulation. If during implementation it is found that the special financial center has a larger portfolio of Financing to non-MSMEs compared to the portfolio of Financing to MSMEs, the Financial Services Authority may order BPR NAEL to increase the dominance of the Financing to MSMEs portfolio in the special financial center or order the BPR to close the said special financial center. Regulatory provisions include, among others:
a. Financial Services Authority Regulations regarding the conduct of general banking products; b. Financial Services Authority Regulations regarding people's economic banks and sharia people's economic banks; and
c. Financial Services Authority Regulations regarding the conduct of business activities, for each LKNB.

Article 32
Is clear enough.

Article 33
Is clear enough.

Article 34
Is clear enough.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 157/OJK