Jakarta. A senior government official on Thursday highlighted the crucial role played by micro, small, and medium enterprises (MSMEs) in driving the Indonesian economy forward. 

These enterprises contributed an impressive 60 percent to the country's gross domestic product (GDP) last year, underscoring their significance in sustaining economic growth and stability. Furthermore, MSMEs accounted for an overwhelming 97 percent of overall job opportunities within the nation.

Despite the challenges posed by the ongoing pandemic, MSMEs have demonstrated resilience and adaptability in the face of adversity, according to MSME Minister Teten Masduki. 

Recognizing their resilience, the government has emphasized the need to empower these enterprises with technology and digitalization tools, enabling them to expand their businesses and effectively navigate the current and future economic landscape.

Encouraging Indonesian MSMEs to embrace the digital era, Teten emphasized the pivotal role of e-commerce in broadening their market reach. By leveraging online platforms, MSMEs can tap into a wider customer base and establish a stronger presence in the digital marketplace.

The government is actively advocating for partnerships between MSMEs and large corporations or state-owned companies. Such collaborations would allow MSMEs to participate in the industrialization process, leveraging local resources and becoming integral players in the global value chain. 

Government data show that as of the first quarter of the year, 5,022 MSMEs have established partnerships with state-owned companies with a value of Rp 4.9 trillion.

"However the number remains relatively small – only around 7 percent of overall MSMEs have been involved in the global supply chain or in partnership with large-scale businesses. We want to increase this number," Teten said

In addition to facilitating partnerships, the government is committed to improving access to small business loans for MSMEs. Presently, only 21 percent of these enterprises have received bank credits, a figure that President Joko Widodo has urged to increase to at least 30 percent. 

Minister Teten urged banks to adapt their approach and work towards enhancing financial support for small businesses.

“MSMEs don’t have many assets they can use as collateral for business loans,” Teten said

While supporting MSMEs' access to finance and partnerships, Teten also emphasized the importance of these enterprises delivering quality products with innovative designs and consistent supplies. By fostering creativity and maintaining high standards, MSMEs can effectively meet consumer demands and thrive in a competitive market.

Indonesia will celebrate the MSME Day, which will be held in August in the Central Java town of Surakarta. The event will bring together hundreds of MSMEs from different regions and government agencies.

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