OJK Urges Banks to Anticipate Credit Risks with Maximum 5 Percent Interest

by Shama Mangla · May 18, 2026

OJK Urges Banks to Anticipate Credit Risks with Maximum 5 Percent Interest - RakyatPost.co

The Financial Services Authority (OJK) has requested national banks to anticipate potential risks arising from the distribution of credit with a maximum interest rate of 5 percent.

This appeal was issued amid efforts to encourage cheaper access to financing for the public and business actors to support national economic growth.

According to OJK, low-interest credit programs can indeed help increase purchasing power and business activity, particularly in the micro, small, and medium enterprise (MSME) sector.

However, on the other hand, banks are still required to maintain the quality of credit distribution so as not to trigger an increase in non-performing loans (NPL).

Banking observers assess that setting low credit interest rates could put pressure on bank profit margins if it is not balanced with sound risk management.

In addition to the risk of default, banks are also asked to pay attention to the borrower’s capacity, collateral quality, and the resilience of the business sector receiving the financing.

OJK emphasized the importance of the principle of prudence in the credit distribution process, even as the government and regulators continue to push for more affordable financing.

In recent years, low-interest credit has become a key strategy to support economic recovery and increase public financial inclusion.

Economic observers believe that the success of cheap credit programs depends heavily on the balance between financing growth and the stability of the financial sector.

Banking institutions are expected to be able to expand access to productive credit without compromising asset quality and the overall health of the banking industry.