Deputy Minister Of Finance Asks Banks To Expand Credit Access To MSME Actors

JAKARTA - Deputy Minister of Finance Suahasil Nazara asked banks to increase access to credit for MSME players to support the achievement of the target of 30 percent credit or banking financing for MSMEs by 2025.

"Mr. President conveyed that the banking allocation for MSMEs should be 30 percent, meaning that MSMEs are expanded, access is given," he said when delivering his remarks at the 2022 Banking Service Excellence Award held by InfoBank in Jakarta, quoted from Antara, Friday 1 July.

The Ministry of Finance, he continued, is ready to assist banks in terms of the regulatory framework to help achieve the target of 30 percent of loans for MSMEs.

"The second request is for banking intermediaries, Mr. President said recently when shopping for domestic products," he said.

Suahasil wants banks to play an intermediary function by encouraging the use of domestic products that will provide a multiplier effect for government spending and public spending.

The government, he stressed, is trying to maximize local content, including fulfilling the catalog of government expenditures, state-owned enterprises and local governments.

"We are also encouraging the regional government, we are leading. I hope that the banks that carry out the banking intermediation function can also encourage this," he said.

In addition, Suahasil also reminded banks to encourage credit that supports financial sustainability for sectors and services that support the realization of green energy. This is in line with Indonesia's commitment to fulfill net zero emissions.

Even though in the current short-term reality, some countries such as Germany are returning to fossil energy due to global geopolitical and economic turmoil, the transition to green energy and a green economy remains a priority for the medium and long term.

"Ladies and gentlemen who are in the banking sector who manage banks, must have been able to feel that financing for non-green activities is getting more difficult and more expensive and this trend will continue," he said.

Furthermore, Suahasil also said that the expansion of bank credit continues to be encouraged to support the economic recovery program while maintaining prudence and risk management.

Until May 2022, the credit growth rate reached 9.03 percent (yoy) or slightly decreased compared to April's 9.1 percent (yoy). However, all types of loans showed an increasing trend, especially working capital loans which grew by 11.6 percent (yoy). Likewise with mining sector credit, which soared in line with the increase in commodity prices, which grew by 45.67 percent (yoy).