Launches MSME Financing Book, Coordinating Minister Airlangga Conveys The Government's Alignment To The Backbone Of The Indonesian Economy

Coordinating Minister for Economic Affairs, Airlangga Hartarto. (Photo: Doc. Coordinating Ministry for the Economy)

JAKARTA - Micro, Small and Medium Enterprises (MSMEs) undoubtedly have the ability to support the economy and at the same time have the characteristics of being resilient during periods of crisis in Indonesia. This can be seen in the 1997/1998 monetary crisis and the 2008/2009 financial crisis period.

In addition, MSMEs also have an important role for the Indonesian economy towards a Golden Indonesia in 2045. On many occasions, the Coordinating Minister for Economic Affairs Airlangga Hartarto has emphasized that MSMEs are also critical engines that play an important role in maintaining the momentum of economic recovery during the COVID-19 pandemic period.

The contribution of MSMEs to GDP has reached 61 percent with the ability to absorb labor reaching 97 percent of the total national employment. In addition, MSMEs also play a role in encouraging increased investment and Indonesian exports.

Total investment in the MSME sector has reached 60 percent of the total national investment and its contribution to national non-oil exports has reached 16 percent.

The importance of the role of MSMEs for the economy is the background for the launch of a book entitled "MSME Financing" in Jakarta on a hybrid basis, Thursday 11 November, to share knowledge and experiences.

In general, the book explains the development and important role of financing for MSMEs. The book "MSME Financing" also describes the Government's efforts to encourage increased access to MSME financing from time to time.

"This book is important to share knowledge related to MSMEs which is one of the pillars of why economic growth can still survive during COVID-19. MSMEs have always been a buffer in various economic crises since 1998, 2008 and in the era of the COVID-19 pandemic," explained Coordinating Minister Airlangga. .

This book is the fourth book of Coordinating Minister Airlangga. Previously, Coordinating Minister Airlangga had written the 1st book entitled Strategy Clustering, the 2nd Cultivating Hope to Build Industry, and the 3rd entitled Building Independence, Realizing National Energy Sovereignty and Security.

Coordinating Minister Airlangga on the occasion also said that so far the Government has sided with the 64 million MSMEs and the support for the digitalization of MSMEs has become a mainstay. One manifestation of the Government's alignment with MSMEs can be seen from the semi-social assistance program initiated by the Government during the pandemic, namely the Pre-Employment Card, which is recognized by the World Bank as a program that really helps MSMEs during the pandemic.

"We know that the momentum of economic growth of 3.51 percent in the third quarter of 2021 can be carried out because we have a basis, namely the manufacturing base and export activities continue to run. That is what makes Indonesia resilient. Even in October 2021, the Manufacturing PMI reached 57.2, the Index Consumer Confidence is already above 100, retail and others have increased, and from a banking perspective the NPL is low. This makes us optimistic in the fourth quarter," said Coordinating Minister Airlangga.

Furthermore, Coordinating Minister Airlangga also said that digital transformation and financial inclusion are expected to be the mainstay or lessons learned for Indonesia's interests in the G20 Presidency and have been discussed in the G20 side event in Rome.

On the occasion, Coordinating Minister Airlangga also said that President Joko Widodo had given directions for increasing MSME loans by 20 percent, which was pushed to reach 24 percent by 2024.

"Of course we see that several other countries also have sides with MSMEs such as South Korea and Japan. Countries that have strong support for MSMEs are able to get out of the middle income trap," said Coordinating Minister Airlangga.

For this reason, Indonesia also encourages MSMEs in the form of various guarantees and business loans that are targeted to continue to increase.

The book "MSME Financing" was compiled in a complete and systematic way so that it became one of the comprehensive books in discussing the development of MSMEs, especially related to the financing side. The book "MSME Financing" is also supported by historically complete evidence data, making it easier for readers to see the development of MSMEs more credibly. Everything is packaged in writing using semi-popular languages so that it keeps the book fresh and light to read.

"I hope that documentation efforts in the form of this book can make a positive contribution in helping the development of MSMEs, especially in terms of financing. The government is committed to continuing to encourage the empowerment of MSMEs so that they can advance to class and make a greater contribution to the economy," said Coordinating Minister Airlangga.

At the launch of the book "MSME Financing", the Deputy for Macroeconomics and Finance of the Coordinating Ministry for the Economy, Iskandar Simorangkir, also gave welcoming remarks regarding the book's systematics and future socialization plans.

Several important figures and academics in the development of MSMEs in Indonesia also gave testimonies related to the contents of the book, including the Minister of Cooperatives and SMEs Teten Masduki, Chairman of the OJK Board of Commissioners Wimboh Santoso, and the Chancellor of the University of Indonesia Prof. Ari Kuncoro.

In their testimonies, these figures explained that the book "MSME Financing" is a comprehensive source of literacy in the development of MSME financing in Indonesia and plays an important role in encouraging the improvement of MSME competitiveness.