Government Supports Economic Recovery Through The MSME Sector

UMKM production activities (Photo: Special)

JAKARTA - The government, through the Coordinating Ministry for Economic Affairs, said that the handling of the pandemic continued to show encouraging results, especially after the implementation of Micro PPKM in 15 provinces and the implementation of the vaccination program.

Coordinating Minister for Economic Affairs Airlangga Hartarto said that in 2021 the government was confident that the Indonesian economy would be able to grow, supported by the support of the National Economic Recovery Program (PEN).

"From an economic standpoint, the PEN program continues to be encouraged to strengthen the purchasing power (demand) and production (supply) side," he said as quoted from the official website, Friday, April 2.

Airlangga added, specifically for support for micro, small and medium enterprises (MSMEs), a PEN budget of IDR 184.8 trillion has been allocated.

The budget for MSME support and corporate financing is provided through six stimuli, namely MSME interest subsidies, micro-business productive assistance, guarantee fee subsidies (IJP), placement of funds with commercial banks, tax incentives, and credit restructuring.

"The government gives priority to the recovery of MSMEs because of its strategic role for the national economy. MSMEs contribute 61 percent to national economic growth and absorb 97 percent of the current workforce, "he said.

The government's decision to support the MSME sector is also supported by the latest data. Based on a survey by the Ministry of Cooperatives and SMEs, it was found that 23 percent of MSMEs experienced a decrease in business turnover, and 19.45 percent of MSMEs experienced capital constraints.

"One of the government's steps to revive MSME economic activity is by stimulating working capital through KUR with low interest rates and without additional collateral," he said.

Meanwhile, the facilities that can be received by these small segment entrepreneurs include a subsidized KUR with an interest rate of 3 percent.

"The government needs the cooperation of all stakeholders, including the public and MSME players, to ensure that all policies can be implemented properly so that MSME business activities will strengthen and have the opportunity to leverage national economic growth," he explained.

For information, the government projects this year's growth to be in the range of 4.5 percent to 5.3 percent.