JAKARTA, KOMPAS.com – The Indonesian government has set a target of distributing a total of 2,000 trillion rupiahs ($140.3 billion) to finance micro, small-medium enterprises (MSMEs) credit program, a senior minister said on Thursday, September 9.
Coordinating Minister for Economic Affairs Airlangga Hartarto said that the government has required banks to provide a minimum of 30 percent for MSMEs credit program in 2020.
“There is an additional loan of 980 trillion rupiahs ($69 billion) to achieve the target of 2,000 trillion rupiahs for MSMEs credit program in 2024,” said Airlangga.
In line with the National Economic Recovery Program (PEN), banks are expected to support the MSMEs, which mostly engage in the informal sector and have a significant contribution to gross domestic product (GDP).
“Most of them are in the informal sector and they play a significant role to drive the economic growth,” he said, adding that the credit program will be implemented in stages from 2021 to 2024.
To accelerate the economic recovery program, the government and its stakeholders continue to work closely to develop policies.
“The government has responded to the risk of a slowdown in the economic recovery by refocusing on the National Economic Recovery Program regulation. This is to enhance health and social protection to maintain people’s purchasing power and improve health to support small businesses during the partial lockdown,” he said.
The senior minister said that as of May 2021, the MSMEs loans reached 18.59 percent of the total credit disbursement. In 2019, the number of MSMEs reached 99 percent of the total business units and provided jobs to 96.9 percent of the total workforce in Indonesia.
“Overall, MSMEs contribute 60.5 percent to Indonesia’s GDP. One of the main challenges of reviving the economy and MSMEs is to provide access to finance.”
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