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Apriliya Wahyuningsih, S.T.
Journal of Business Management and Entrepreneurship (2025)
Indonesia operates one of the largest subsidised credit programmes in the developing world. The People's Business Credit scheme disburses hundreds of trillions of rupiah annually to micro, small and medium enterprises at interest rates set well below market, with the state guaranteeing seventy per cent of each loan. This study examined the programme's targeting and concentration using official performance reports published by the coordinating ministry, and interpreted the pattern against the international literature on government credit guarantees and subsidised lending. Three findings emerge. First, disbursement is highly volatile relative to target: realisation reached 103.24 per cent of target in 2022 but fell to 87.57 per cent in 2023, a decline of more than a quarter in absolute terms, before recovering to 112.08 per cent in 2024. Second, portfolio quality deteriorated markedly, with the non-performing loan ratio rising from 0.84 per cent in August 2020 to 2.03 per cent in December 2023. Third, delivery is extremely concentrated: one state bank accounted for 68.5 per cent of cumulative disbursement, Java for 54.56 per cent, and trade for over half of sectoral allocation. Published impact evaluation indicates that 68.55 per cent of recipients come from the upper seven expenditure deciles. The study argues that the programme's scale has outpaced its targeting architecture, and that concentration in delivery is itself a policy variable requiring management.