Indonesian MSMEs Need Fintech Companies to Grow Business, Minister Says

JAKARTA, KOMPAS.com – Indonesia’s Cooperatives and Small and Medium Enterprises Minister Teten Masduki said that fintech companies play an important role in boosting the development of micro, small and medium enterprises (MSMEs).

Teten argued that fintech companies can help new developments of tech startups and promote the effectiveness and efficiency of business operations — recording transactions, inventory management — to access financial services.

“We hope that fintech companies can work together with the [MSMEs] community by helping them to obtain financial services,” said Teten in a statement on Friday, November 13.

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“Half of MSMEs are bankable and this can bring impact to fintech business to go grow rapidly,” he added.

Teten explained the Financial Services Authority (OJK) data said that there has been an increase in the growth of fintech and lending companies.

The increase comprises public financial literacy, especially MSMEs in obtaining financial services and financial transactions.

“Fintech company is needed by MSMEs. Indonesia’s digital financial literacy rate has only reached 35.5 percent,” he said.

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He went on to say that about 16 percent of MSMEs were connected to digital platforms or around 10.2 million MSMEs. However, the main problem faced is related to MSME financial reports.