The Minister Of Teten Thinks That 50 Percent Of MSMEs Cannot Pay Installments

JAKARTA - The Ministry of Cooperatives and SMEs has revealed that due to the corona pandemic or COVID-19, entrepreneurs have experienced a decline in sales, leading to difficulties in capital and raw materials. In fact, there are also those who have difficulty paying the installments.

Minister of SME Cooperatives, Teten Masduki, said that the business activities of MSME players were greatly disrupted due to reduced demand, resulting in cash flow difficulties for them. Currently, the number of MSME players in Indonesia reaches around 64 million.

Furthermore, Teten explained, the COVID-19 pandemic has made MSMEs under pressure from two sides, namely supply and demand.

"Today our data and we continue to tour, such as in traditional markets, cooperatives, MSMEs, their business activities are indeed disrupted 30 percent to 50 percent. So they are no longer able to pay installments," he said in a virtual discussion, Wednesday, July 8.

Teten said, in the National Economic Recovery (PEN) program, one of the government's focuses is to support the MSME sector to revive itself. Of the total cost of handling COVID-19 and also PEN of Rp.695.2 trillion, which is allocated for the MSME sector of Rp.123.46 trillion

Apart from the PEN program, said Teten, currently the ministry he leads is also developing new ideas to help UMKM in terms of financing.

"Even though the PEN policy has been established, it is still possible that there will be new proposals that are more appropriate for MSMEs," he said.

Being the backbone in improving the community's economy, MSMEs will have a big role in the recovery of the national economy due to COVID-19.

Teten said, although the government has prepared around Rp. 600 trillion for economic stimulus and health insurance, restoring the economy and health is certainly not easy if the PSBB is still in effect.

"I think it will be difficult. Especially if we cannot end this (impact) of COVID-19 until September. In the future I think it will be very difficult," he explained.

Previously, Bank Indonesia recorded that 72.6 percent of micro, small and medium enterprises were affected by the COVID-19 pandemic. These entrepreneurs experienced a decline in sales, causing difficulties with capital and raw materials.

Head of the Department of UMKM Development and Bank Indonesia Consumer Protection Budi Hanoto said, COVID-19 disrupts the performance of MSMEs. Based on the sector, the hit UMKM agriculture reached 41.5 percent, exporters UMKM reached 95.4 percent, and handicraft and tourism UMKM reached 89.9 percent.

For #SobatKUKM who have received KUR restructuring, they can get subsidies from the National Economic Recovery program again, you know! # ReadyBersamaKUMKM # KemenkopUKM # KoperasiKeren # UMKMNaikKelas # TetenMasduki pic.twitter.com/NH6ux915gN

- The Ministry of Education and Culture (@COMPRI) July 8, 2020

According to Budi, the average decline in their turnover reached more than 50 percent. In fact, MSMEs have a strategic role in supporting the national economy.

BI even recorded that the real gross domestic product produced by the MSME sector in 2018 reached IDR 694 trillion or grew 7.3 percent compared to the previous year. A total of 64.2 million UMKM business units currently exist, which can absorb 116.98 million workers.