Kemenkop UKM Calls MSME Credit Target 30 Percent Will Not Be Achieved This Year

Acting Deputy for SMEs Kemenkop UKM Temmy Satya Permana (center). Photo: Theresia Agatha/VOI

JAKARTA - The Ministry of Cooperatives and SMEs (Kemenkop UKM) is pessimistic that a credit target of 30 percent for Micro, Small and Medium Enterprises (MSMEs), will be achieved in 2024.

It is known that President Joko Widodo (Jokowi) is targeting the ratio of bank credit for MSME players in Indonesia to increase to 30 percent by 2024.

"(The target) like that will not be achieved because we have many factors to convey," said Acting Deputy for SMEs at the Ministry of Cooperatives and SMEs, Temmy Satya Permana, at a press conference at the Kemenkop UKM office, quoted Friday, October 4.

Temmy said, there is still homework to be done, one of which is related to MSME loans.

"This means that if we talk about (subsidies) of Rp. 1,364 trillion in credit to MSMEs, more than 50 percent are small and medium-scale loans, which are not subsidized, there are no incentives from the government," said Temmy.

"If the micro (business) has a People's Business Credit KUR (KUR), Madani National Capital (PNM) and others, there is a Pegadaian," he continued.

Meanwhile, Temmy said, for small and medium businesses, the average was left to the industry at normal banking interest rates.

"Well, from the results submitted, our credit interest rate for small and medium is still relatively high in 2021 at 8.59 percent," he said.

Temmy said the number of small and medium enterprises was around 250,000. "Those we hope can be export drivers, including employment in the formal sector. That's our hope," he said.

From Bappenas' prediction, said Temmy, the ratio of bank credit for MSME players could only reach 24 percent by the end of 2024.

"This is Bappenas' prediction. So, we will wait until December what it will be like. Hopefully, however, at the end of the third quarter there will be significant improvements to our economic condition," he said.

For your information, President Jokowi targets the ratio of bank credit for MSME players in Indonesia to increase to 30 percent by 2024.

A number of strategies have been prepared by the Ministry of Cooperatives and SMEs to achieve this target, including by providing assistance to MSME actors so that financial literacy understanding is getting better.