Sales of Indonesian SMEs Plunge by As Much As 60pct during Coronavirus Pandemic

JAKARTA, KOMPAS.com – Indonesian SMEs have reported sales falling by as much as 60 percent as a result of the coronavirus pandemic.

Since Indonesia first announced its first Covid-19 cases that would later spur lockdowns across parts of the country, Indonesian SMEs have faced a tough time weathering out the economic storm.

Indonesia’s Coordinating Ministry of Economic Affairs admitted that Indonesian SMEs are one of the groups hard hit in the coronavirus pandemic.

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The ministry has received reports of plunging sales across the board for the country’s small businesses.

News of Indonesian SMEs’ downward trend in sales was made known from a report by the Business Development Services Indonesia Association.

The association conducted a survey among 6,000 Indonesian SMEs across the country between April and May 2020.

“The government realizes that Indonesian SMEs are truly one the worst affected by the Covid-19 virus,” said Iskandar Simorangkir, Deputy Minister for Macroeconomic and Financial Coordination at the Coordinating Ministry for Economic Affairs.

The survey results indicated that 36.7 percent of Indonesian SMEs have made zero sales since the pandemic.

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Around 26.6 percent of Indonesian SMEs have reported a drop in sales by 60 percent while another 15 percent have experienced sales falling 31 to 60 percent.

An additional 14.2 percent of Indonesia’s small businesses reported a sales drop between 10 and 30 percent although 4.5 percent of the businesses experienced stable sales performance amid the pandemic.

A mere 3.6 percent of Indonesian SMEs recorded an uptick in sales performance.

Iskandar acknowledged that although some Indonesian SMEs experienced sales growth, the figure does not compare to the number of businesses experiencing a slump in sales.

Read also: Luhut Panjaitan: Indonesian SMEs are the Backbone of National Economy

The majority of the smaller businesses that reported higher sales performance were those selling medical gear such as masks or personal protective gear.

Iskandar shared that the pandemic has pushed some Indonesian SMEs to transition to online sales channels.

On the other hand, a staggering 92.6 percent of Indonesian SMEs admitted to facing difficulties in repaying loans.

Read also: Go Digital, Indonesian Agricultural Small Businesses Urged

Around 26.6 percent of them are unable to pay back any loans.

These obstacles have urged the Indonesian government to issue various policies to revive Indonesian SMEs.

Iskandar said that the Indonesian government has subsidized the interest rate of the People’s Business Credit (KUR) program.

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The government will subsidize the KUR program for another six months or until December 31, 2020.

An added subsidy of 6 percent will be given during the first three months while another 3 percent will be added during the following three months.

Iskandar said that the Indonesian government is focused on supporting Indonesian SMEs amid the coronavirus pandemic as they form the backbone of the national economy. 

(Writer: Yohana Artha Uly | Editor: Sakina Rakhma Diah Setiawan) 

Source: https://money.kompas.com/read/2020/07/15/131013826/hampir-seluruh-umkm-di-indonesia-turun-penjualannya-di-masa-pandemi