Jokowi Highlights Distribution Of MSME Loans Losing To China, This Is Erick Thohir's Response

SOE Minister Erick Thohir (Photo: Antara)

JAKARTA - President Joko Widodo (Jokowi) highlighted that the portion of bank credit to the MSME sector is still relatively low, which is only 21 percent. In fact, losing to other countries, such as China.

Jokowi said the portion of MSME lending in China reached 65 percent, as well as Japan at 65 percent, and India at 50 percent. Therefore, Jokowi asked banks to facilitate the requirements for lending to MSMEs.

"This MSME financing must be made easier. Because if we look at the distribution of bank credit to MSMEs, only 21 percent of the total credit," he said at the opening ceremony of the 2023 MSME Explo Exprianeur at JCC Senayan, Jakarta, Thursday, December 7.

Jokowi also asked SOE Minister Erick Thohir to coordinate with Bank Indonesia (BI) and the Financial Services Authority (OJK) to make regulations that support the ease of lending for MSMEs.

One of them, said Jokowi, was the expansion of unsecured credit for MSME actors. According to him, not all MSME actors have assets to be collateral in applying for credit.

"Don't just look at the collateral, which collateral. Also look at the prospects, don't have collateral, but the prospects are good, credit should also be given," he said.

By gaining access to financing, Jokowi continued, it will help MSMEs grow, and even reach the global market. Currently, new MSME exports are 15.7 percent, still below Singapore which amounted to 41 percent and Thailand at 29 percent.

"These are our big works," he said.

Responding to the directive, SOE Minister Erick Thohir said his party together with the State Bank Association (Himbara), the Ministry of Finance, BI and OJK will harmonize regulations that support the ease of lending to MSME actors.

"The role of this policy must be aligned so that there is easy access, especially the President spoke about grand and prospects," said Erick.

As of September 2023, said Erick, the total financing that Himbara had disbursed to MSMEs had reached Rp1,600 trillion. As much as 83 percent of the distribution value came from BRI.

Erick also said Himbara had succeeded in encouraging as many as 30 million MSME players to enter the digital ecosystem to improve classes.

"Is this enough? Not yet. That's why we encourage more conducive things," he explained.

Meanwhile, BRI President Director Sunarso emphasized that basically the disbursement of MSME loans without collateral had begun. However, he continued, it is only limited to the People's Business Credit (KUR) program with a loan ceiling of Rp. 100 million.

"Actually, now, the policy for KUR up to Rp. 100 million is without guarantees. So just increase the KUR below Rp. 100 million, so that later everything will be without guarantees, because the policy already exists," said Sunarso.