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Nowadays, the ratio of non performing loans at commercial banks is very high, therefore the impact on credit risk assessment is not only related to bank profitability, but also in maintaining the stability of the entire financial system, which can affect the national economy. In other words, it is not sufficient to only gaining benefits from the credit, but to assess whether the benefits obtained can cover the risks that will occur is also needed. Based on the explanation above, banks need a model that can measure credit risk and predict credit risk that will be faced by the banks. Currently, Bank Mandiri has applied a standard approach in measuring Credit Risk, but this approach is assumed not to reflect the actual credit risk, especially SME loans. This study aims to measure credit risk for Bank Mandiri SMEs using the CreditRisk plus approach by comparing the cost of capital provided using a standardized approach and evaluating whether the CreditRisk plus approach can be used as an internal model that fulfills Bank of Indonesia criteria