The Minister Of MSMEs Emphasized The Importance Of Business Risk Mitigation Insurance

Minister of MSMEs Maman Abdurrahman on the sidelines of Insurance Day 2025, in Nusa Dua, Badung Regency, Bali, Saturday (18/10/2025). BETWEEN

NUSA Dua, BALI - Minister of Micro, Small and Medium Enterprises (MSMEs) Maman Abdurrahman emphasized the importance of the role of insurance to mitigate the risk of entrepreneurs to ensure business sustainability.

"In the midst of global economic uncertainty and the threat of climate change that is increasingly felt by the impact on business processes, especially for MSME entrepreneurs, insurance is an important instrument," said Maman Abdurrahman on the sidelines of Insurance Day 2025, in Nusa Dua, Badung Regency, Bali, Saturday.

Although insurance has an important role, the Minister of MSMEs explained that only about 2.96 percent of MSMEs in Indonesia have disaster insurance, and 53 percent of them do not make any preparations in dealing with potential disasters.

Based on data from the Ministry of MSMEs, MSME players in Indonesia are estimated to reach around 57 million entrepreneurs and contribute 61.2 percent to Gross Domestic Product (GDP) and absorb 97 percent of the national workforce.

Meanwhile, based on data from the Asian Development Bank (ADB) in 2024 MSMEs, especially micro-enterprises, are sectors that are very vulnerable to economic shocks and disasters.

As many as 40 percent of MSMEs, he said, were unable to rise after being affected by the disaster, while as many as 25 percent could only recover after more than two years.

"Insurance is not only present as protection, but also a supporter of enthusiasm to rise and continue the business," said Minister Maman.

However, the level of inclusion and literacy of insurance products in Indonesia is still relatively low.

Based on data from the 2025 National Literacy and Financial Inclusion Survey (SNLIK), the achievement of literacy and inclusion indexes in the insurance sector has indeed increased.

The insurance literacy index increased significantly to 45.45 percent compared to 2024 by 36.9 percent, while the inclusion index also jumped to 28.50 percent from the previous year reaching 12.12 percent.

Even though there has been an increase, from the data there is still a gap between inclusion and literacy, so it indicates that there are still people who use financial products but do not fully understand.

Therefore, Minister Maman invites all insurance company associations to collaborate more intensively in increasing insurance literacy among MSME entrepreneurs.

According to him, low insurance literacy is not only a matter of knowledge, but also has a direct impact on business resilience.

The reason, he continued, is that insurance actually has a strategic role in supporting the government's productive financing, such as the People's Business Credit (KUR) program.

"Through insurance protection, lending and access to financing for MSME entrepreneurs, it is hoped that it will continue to increase," said Maman again.

The Ministry of MSMEs noted that until October 17, 2025, the distribution of KUR had reached IDR 217.1 trillion, which was distributed to nearly 3.7 million beneficiary MSME entrepreneurs.

Of this amount, 60.6 percent or Rp129 trillion was channeled to the production sector to increase the impact of doubling on the national economy.

"If the distribution of financing to the production sector continues to be increased, there will be more economic benefits that can be felt widely," he also said.