According to MSME Minister Teten Masduki, Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in driving the Indonesian economy forward, contributing 60-percent to the country’s gross domestic product (GDP) and 97-percent of overall job opportunities in 2022, report Jakarta Globe.
Despite challenges MSMEs have demonstrated resilience and adaptability in the face of adversity, according to 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.
Jakarta Globe say that encouraging Indonesian MSMEs to embrace the digital era, Masduki 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, say Jakarta Globe, which 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, more than 5,000-MSMEs have established partnerships with state-owned companies with a value of IDR 4.9-trillion, say Jakarta Globe.
“However the number remains relatively small as only around 7-percent of MSMEs have been involved in the global supply chain or in partnership with large-scale businesses. We want to increase this number,” Masduki said.
Jakarta Globe report that 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.
The minister urged banks to adapt their approach and work towards enhancing financial support for small businesses explaining that “MSMEs don’t have many assets they can use as collateral for business loans.”
While supporting MSMEs’ access to finance and partnerships, the minister 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, report Jakarta Globe.
Indonesia will celebrate MSME Day, in August in the Central Java town of Surakarta. The event will bring together hundreds of MSMEs from different regions and government agencies.
Source: Jakarta Globe
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