Sri Mulyani Reveals the Large Role of MSMEs in the Indonesian Economy

Minister of Finance Sri Mulyani. (Photo: Doc. ANTARA)

JAKARTA - Minister of Finance Sri Mulyani Indrawati said the role of Micro, Small and Medium Enterprises (MSMEs) reached 61.1 percent of Gross Domestic Product (GDP).

However, with the current number of MSMEs they have not been able to penetrate the export market.

Sri Mulyani said that the employment of Micro, Small and Medium Enterprises (MSMEs) has now reached 97 percent, with a contribution to GDP of 61.1 percent. However, the contribution of MSMEs to the export market is still relatively low compared to other countries, namely only 15.8 percent.

Meanwhile, this figure is lower when compared to Sri Lanka, namely 20 percent, Malaysia 19 percent, Vietnam 20 percent, Pakistan 25 percent, Thailand 29.5 percent, Korea 30.9 percent, India 40 percent, and Japan 53.8 percent.

"MSMEs contribute up to 61 percent to GDP, this is also relatively higher compared to countries in ASEAN and G20 countries. "Meanwhile, MSMEs, which are so large in number and have an impact on the economy, have not been able to penetrate the export market," said Sri Mulyani at the BRI Microfinance 2024 agenda in Jakarta, Thursday, March 7 2024.

Sri Mulyani said that one of the things that hinders MSMEs from penetrating the export market is financing.

"29.2 million are unable to access financing. This is more because access is a constraint or because of affordability problems, this is what I hope for BRI to penetrate, down to the grass roots through BRIlink agents, to be able to penetrate and be able to reach 29.2 million people who have not get access to financing," she said.

Sri Mulyani said that other factors that influence many MSMEs have not received financing because they do not have collateral, high interest rates, do not know loan procedures, and have difficulty fulfilling loan procedures.

Apart from that, Sri Mulyani said, to date 121.7 million people or MSMEs have received access to financing. This consists of 40.5 million people getting financing through People's Business Credit (KUR), 20.8 million people getting financing from BPR, 35.8 million people through Special Financial Institutions, 7.6 million people through BLU Fund Management, and 17 million people through P2P Lending.

This data does not include financing from non-KUR, cooperatives, Micro Waqf banks, Special Financial Institutions, and PT PNM and Pegadaian.

Sri Mulyani said that increasing the empowerment of MSMEs is part of all stakeholders so that Indonesian MSMEs can compete so they can penetrate foreign markets.

"The need for empowerment from the MSME side so that they are able to perform and have productivity and competitiveness, is in line with our desire to increase our trade and export performance even higher," she concluded.