Minister Teten Reveals A Series Of RI MSME Obstacles, Making Him Lose To China-Japan

Menkop UKM Teten Masduki (Photo: Theresia Agatha/VOI)

JAKARTA - The Ministry of Cooperatives and SMEs (Kemenkop UKM) said, there are a number of obstacles for micro, small and medium enterprises (MSMEs) to find it difficult to develop their businesses.

Minister of Cooperatives and SMEs (Menkop UKM) Teten said this was because many national MSME players still had difficulty getting financing, it was difficult to access production technology, making it difficult to access the market.

Teten assessed that the obstacle was also caused by many Indonesian MSME players who had not been connected to the production supply chain. According to him, currently there are still many MSMEs that are independent, so starting from buying raw materials, the production process to the marketing process itself.

"In fact, if we look at MSMEs in the countries we use as benchmarking, such as South Korea and Japan, MSMEs have become part of the industrial supply chain. So, not individually," said Teten in the Forwakop Discussion agenda related to the role of MSMEs in Downstreaming the Aquaculture and Agriculture Sector, Friday, March 8.

According to Teten, the emergence of a number of obstacles is because MSMEs have not become part of the industrial supply chain. Thus, the financing of MSMEs in the agricultural sector has only reached 30 percent and fisheries is only 2 percent.

He added that the difficulty of this financing was also influenced by banking trust or borrowing institutions to business actors. They are worried that MSME players will not be able to pay off because the sale of their products is still not massive.

"Why is financing MSMEs still difficult? Because the ecosystem is not complete. If banks want to provide financing, there must be guarantees. Can you? From the producer side, the agricultural side, right, you can't go directly to the market or industry," said Teten.

Therefore, Teten encourages the importance of downstreaming in the agricultural and fishery sectors. According to him, downstreaming is not only to grow product added value, but also to form its business ecosystem.

Thus, MSME actors no longer sell raw goods, but start to enter the supply chain.

"The downstreaming not only increases the added value of the product, but also these two sectors are dominated by MSME players. So, downstreaming should not be interpreted as just processing raw goods, but also building MSMEs as part of industrialization," he added.