Teten Asks Banks To Increase Production Financing For MSMEs, This Is The Goal

JAKARTA - Minister of Cooperatives and SMEs (Menkop UKM) Teten Masduki asked national banks to increase the financing of MSMEs in the production sector to strengthen the capacity and quality of products, so that MSME products are able to control the domestic market.

"Because that's where our MSME drawbacks are, which is that they do not get financial support in the production sector," said Coordinating Minister for SMEs Teten Masduki in a press release, Wednesday, August 9.

Teten admitted that it was not surprising that many local markets were flooded with products from abroad as a result of the lack of financial support for MSMEs.

"We have to make it easier for MSMEs to get access to bank financing to be more competitive. Do not let foreign products so easily enter the national market. We continue to defend MSME products," he said.

As for this year, the government has allocated IDR 450 trillion for the People's Business Credit (KUR) program for MSMEs. Then, there is a policy of IDR 100 million without collateral. Teten also hopes that banks can run this government program, so that MSMEs will no longer have difficulty accessing financing.

He also really wants banks to no longer use physical collateral schemes (assets), but credit scoring in disbursing MSME loans.

Credit scoring is a credit scoring system for assessing the feasibility of prospective borrowers using certain metrics. For example, such as the amount of credit ever owned, ownership of credit burdens, and how often in arrears of payments.

According to Teten, the credit scoring scheme is time to implement banking in Indonesia. Moreover, currently, there are around 145 countries that have implemented the scheme and no longer require asset collateral for MSMEs.

"It is recorded that 79 percent of MSMEs have not received access to bank credit, because many MSMEs do not have assets to be used as bank collateral," he said.

On the other hand, Teten also asked MSME actors to register their business activities digitally, so that their business track records were recorded properly and accountably.

"Many digital applications can be used for that. With business records, including financial reports, digitally, the bank only needs to assess that without asking for assets as collateral," he added.