Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto during a public discussion on job creation law on March 30, 2021. (Photo: ANTARA)
Jakarta (VNA) - The Indonesian government has focused onthe recovery of micro-, small- and medium-scale enterprises (MSME) thatsignificantly contributed to driving national economic growth, CoordinatingEconomic Affairs Minister Airlangga Hartarto has stated.
MSMEs have contributed 61.1 percent to the nationaleconomic growth and absorbed 97 percent of the total workforce, or some 116.9million workers, Hartarto noted in a statement.
Hartarto remarked that of the total budgeted 699.43trillion Rp for the national economic recovery programme, 184.83 trillion Rp werechanneled for MSME, Indonesia’s Antara News Agency reported.
Budget disbursal for MSME and corporate funding wasconducted through the provision of six stimuli: interest rate subsidy for MSME,productive aid for micro enterprises, return of guarantee services (IJP)subsidy, fund placement in public banks, tax incentive, and creditrestructurisation.
The minister stated that some MSMEs fell intograve problems owing to the COVID-19 pandemic.
A survey involving 195,099 MSME conducted by the Cooperative, Small and Medium-Scale Enterprises Ministry found that 23.10percent of the MSME had experienced a decline in their business turnover, 19.5percent encountered obstacles in distribution, and 19.45 percent faced problemsin working capital.
An Asian Development Bank (ADB) survey encountered asimilar condition, wherein 30.5 percent of the MSME in Indonesia had recorded adecline in domestic demand and 48.6 percent were temporarily closed.
One of the government's moves to revive MSME'seconomic activity is by providing stimulus in working capital through the microloans scheme with low interest rate and without additional collateral, herevealed.
In 2020, the government had waived off interestpayments and deferred principal installments of KUR for MSMEs affected by theCOVID-19 outbreak for a maximum of six months.
It also established super micro KUR targeting laid-offworkers and the micro-scale home industry.
In 2021, the government has extended the provision ofinterest subsidy of three percent, postponement of principal installments andrelaxation of KUR provisions by extending its term as well as an increase inthe ceiling to 253 trillion Rp.
The government will need the help of all stakeholders,including the public and MSME operators, to ensure that all government policieshave been implemented properly. Thus, the MSME could strengthen theirbusinesses and boost the national economy, Hartarto added./.
