Interest rates are one of the economic factors that can significantly affect business activities, including small and medium-sized enterprises (SMEs).
When Bank Indonesia raises its benchmark interest rate (BI-Rate), the primary objective is to maintain economic stability and support the value of the Indonesian Rupiah. In May 2026, Bank Indonesia increased the BI-Rate to 5.25% to strengthen economic resilience amid global uncertainty. (Source: Bank Indonesia)
So, what does this mean for SMEs?
In general, higher interest rates can lead to increased borrowing costs. As a result, businesses planning to seek financing or expand their operations may need to evaluate their financial strategies more carefully. Financial institutions may also become more selective when assessing financing applications.
However, rising interest rates do not necessarily mean that SMEs cannot grow.
There are several practical steps business owners can take to remain resilient and continue expanding.
First, strengthen cash flow management. When financing becomes more expensive, maintaining healthy cash flow becomes even more critical. Businesses should closely monitor receivables and manage expenses more efficiently.
Second, reassess expansion plans. Not every growth initiative needs to be postponed, but it is important to prioritize investments that generate clear value and support long-term business sustainability.
Third, organize business information and documentation. During periods of economic uncertainty, businesses that maintain structured records and clear business information are often better positioned to demonstrate their credibility to potential partners and financing providers.
Business readiness is not solely determined by products or services. It also depends on how effectively a business presents its identity, track record, and operational information.
For this reason, SMEs should focus on factors they can control rather than external economic conditions.
Interest rates will continue to rise and fall over time. However, businesses with strong foundations, organized data, and a clear business profile will always be better equipped to seize growth opportunities.
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