Accelerate MSME IPO, Teten MoU With IDX

IDX illustration (Dok photo. Antara)

JAKARTA - Minister of Cooperatives and SMEs (Menkop UKM) Teten Masduki supports the acceleration of MSME players to take the floor on the stock exchange through an Initial Public Offering (IPO).

This is by signing a memorandum of understanding with PT Bursa Efek Indonesia (IDX).

"I think this will accelerate (there is acceleration), if we both incubate so that we can have an IPO. I think there is already an incubator, which maybe we also need to continue to empower so that more and more," said Coordinating Minister for SMEs Teten quoting Antara.

Minister Teten said that currently, of the 864 companies that have been listed on the stock exchange, only 4 percent or 33 MSMEs have IPOs. The low number of MSMEs that have successfully gone public, explained Teten because around 30 million MSMEs still do not access banks and 6 million of them access financing to moneylenders.

Therefore, he hopes that the Indonesia Stock Exchange can incubate potential MSME players to offer their shares which will lead to an increase in Indonesia's economy.

"Kebab Bab Rafi is now targeted, we are students, we make a shortcut which can incubation, we encourage IPOs. Maybe in such a way, the Indonesian economy is quite good, so our economic coordination even though the world is very good is quite good. That's unique MSMEs themselves," said Teten.

Through the involvement of the IDX as an incubator, Teten believes that the target of 100 MSMEs going public can be achieved more quickly because so far MSME actors are moving independently which makes the process towards the IPO even longer. It is even possible that later warteg and meatballs will have an IPO with assistance from the IDX.

"Actually, there are many similar business activities, such as meatball stalls, warteg-warteg, other businesses that we can aggregate so that if the minimum value is IDR 50 billion, I think it can, but indeed it needs the involvement of incubators," he said.

President Director of the Indonesia Stock Exchange In Iman Rachman said that one of the biggest challenges for MSMEs was funding. He said MSME actors only know loans through banks, even though there is an alternative funding scheme such as in the form of equity or capital funding.

"This is our goal to explore cooperation, namely with the aim of strengthening the capital market and encouraging MSME players to enter the capital market through the IPO as a definite access to financing," he said.