What is an MSME Loan? These are the Types and How to Apply

Admin BFI
5 April 2024
What is an MSME Loan? These are the Types and How to Apply

In the Indonesian economy, Micro, Small, and Medium Enterprises (MSME) play a very important role. They are the backbone of the economy, creating jobs, and contributing significantly to economic growth. However, one of the biggest challenges faced by MSME is access to adequate financing.

This is where the role of MSME loan becomes very important. So, what is an MSME loan? Check out the various types, steps and requirements that need to be met to apply for it.



1. What is an MSME Loan?

An MSME loan is a type of financing specifically designed to help UMKM actors run or develop their businesses. The loan can be used for various purposes, such as business capital, equipment procurement, purchase of goods, or business expansion. MSME loans are usually provided by various financial institutions, including banks, cooperatives, fintech, and other financing institutions.

2. Types of MSME Loans

2.1 People's Business Credit (KUR)

The first type of MSME loan is the People's Business Credit or KUR. KUR is a government program that aims to support UMKM in obtaining access to financing with low interest rates. This type of MSME loan aims to increase and expand financing for businesses, increase the competitiveness of UMKM, and encourage economic growth in Indonesia.


Also Read: 5 Benefits of Business Capital Loans and Easy Ways to Get Capital


2.2 Working Capital Credit

The UMKM working capital credit type is a type of loan that is given to meet the daily capital needs of running a business. Funds from this loan can be used to finance the purchase of raw materials, pay employee salaries, or meet other operational needs. This type of MSME loan aims to help business actors to continue running or developing their businesses.

2.3 Cooperatives

Cooperatives are often an important source of financing for UMKM. Through cooperatives, UMKM actors can help each other in obtaining access to business capital with a more affordable loan scheme. Cooperatives are a type of MSME loan that upholds the principle of kinship, so they often become the main alternative for people who need MSME loans.

2.4 P2P Lending

The next type of MSME loan is P2P Lending. Peer-to-peer (P2P) lending is an online platform that connects borrowers and lenders directly. P2P Lending is the process of raising funds through a platform that will eventually be given to business owners as loans. This platform allows UMKM to get loans without going through a complicated process like conventional financial institutions.

2.5 Secured Business Capital Loan

A secured business capital loan is a type of MSME loan that requires collateral in the form of certain assets, such as a BPKB or a house certificate. By providing collateral, borrowers can get lower interest rates and larger loan amounts. One company that provides financing with collateral is BFI Finance.


Also Read: How to Get Small Business Loans From BFI Finance

 MSMEs loan

MSMEs Loan BFI Finance. Image Source: Freepik

3. How to Apply for an MSME Loan and Requirements

3.1 How to Apply for an MSME Loan

  1. Check Business Credit and Financial History: The first step before applying for an UMKM loan is to check your personal credit and business financial history. This will help you know how credible you are as a borrower.
  2. Choose a Credible MSME Loan Provider Service: Research various MSME loan provider services and choose one that has a good reputation and loan conditions that suit your needs.
  3. Prepare the Required Documents: Make sure you have prepared all the required documents, such as identity, business supporting documents, and business financial statements.
  4. Fill out the Loan Application Form: Fill out the loan application form completely and honestly. Make sure you provide accurate and reliable information.
  5. Apply for a Loan According to Needs and Ability to Pay: Determine the amount of the loan that suits your business needs and make sure you are able to pay the installments according to the agreed terms.

3.2 Requirements for Applying for an MSME Loan

  1. Identity: Identity documents such as KTP, Family Card (KK), NPWP, and so on are required as proof of the borrower's validity.
  2. Income Documents: Supporting documents such as pay slips, financial records, and savings records will help the lender assess your ability to pay installments.
  3. Vehicle BPKB/House Certificate (If Guaranteed): If you are applying for a loan with collateral, make sure you have the documents that show ownership of the asset.

By meeting the above steps and requirements, you can increase your chances of successfully applying for an MSME loan and getting the financial support you need to grow your business.


MSME loans are an important instrument in supporting the growth and development of micro, small and medium enterprises. By understanding the types of UMKM loans available and the steps and requirements to apply for them, UMKM actors can gain access to financing that suits their needs and business conditions. It is important to always be careful and honest in applying for loans and to ensure the ability to repay the loan according to the agreement that has been set. Thus, MSME loans can be an effective tool in driving economic growth and community prosperity.


If you are an UMKM actor and need funds, you can apply for an MSME loan through BFI Finance, Sobat BFI. Apply for financing at BFI Finance, with a fast and easy process, BFI Finance itself is a financing company that serves multipurpose loans with collateral in the form of motorcycle BPKB, car BPKB, and house or shop certificate for your needs.

Shariah Financing

Purchase sharia used and multi-purpose cars with the No Fines and No Penalties feature See Terms

Home Certificate

Low interest rates start from 0.6% per month and long loan tenors up until 7 years. See Terms

BPKB Motor

Get a loan with a fast process and a maximum tenor of up to 24 months. See Terms


Get a disbursement fund of up to 85% of the vehicle value and a tenor of up to 4 years. See Terms

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