Indonesia's Financial Services Authority published an update positioning the strengthening of Regional Development Banks through Bank Business Groups, known as Kelompok Usaha Bank or KUB, as a key strategy to expand lending to Micro, Small, and Medium Enterprises and support regional economic growth. The message was delivered in a meeting with chief executives and boards of commissioners of KUB parent banks, the implementing parent entity, and all Regional Development Bank KUB members. The completion of KUB formation was framed as a milestone for reinforcing the structure of regional banking, with the group model intended to raise intermediation capacity and the banks’ role as regional development agents through stronger capital, improved governance and effective business synergies. OJK highlighted the need for mutually beneficial cooperation aligned with regional development priorities, including efforts to increase economies of scale, operational efficiency, and product and service innovation, with digital technology cited as a way to broaden financing access; regional governments were also described as strategically important as shareholders, including via supportive local policies and sustained capital strengthening. OJK also convened a regional banking supervision coordination meeting with all heads of OJK regional offices and banking supervision units to align oversight of KUB arrangements, strengthen central and regional coordination, and develop supervisory strategies intended to support healthy and sustainable acceleration of MSME credit.

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