What Puan Said About The Improvement Of The MSMEs Credit Ratio

Speaker of the House of Representatives Puan Maharani (Photo: Antara)

JAKARTA - Chairman of the Indonesian Parliament, Puan Maharani, hopes that the government can realize the desire to increase the credit ratio of micro, small and medium enterprises (MSMEs) for banks to more than 30 percent of total credit.

According to her, increasing the credit ratio could be one of the solutions for the survival of MSMEs in the midst of the COVID-19 pandemic.

"The relevant authorities, including Bank Indonesia, the Financial Services Authority, and the Government must be able to move quickly to formulate policies to make them happen", said Puan in her statement, Tuesday, April 6.

The PDIP Party politician assessed that the opening of banking access with lower interest rates and an easy process for MSME businesses could be one of the solutions for the development of MSMEs during a pandemic.

"Maintaining the survival of MSMEs will, in turn, save the Indonesian economy as has been proven in the 1998 economic crisis", said Puan.

In addition, according to Puan, there needs to be a synergistic intervention from the authorities to save MSMEs.

"Apart from providing lower interest rates and an easier process, all stakeholders should also formulate a program to guide MSME players so that they can apply the principles of sustainable finance and are eligible to become banking debtors", said the legislator for the Central Java electoral district.

Previously, President Joko Widodo wanted an increase in the MSME credit ratio at a limited meeting on Monday, April 5.

Coordinating Minister for Economic Affairs Airlangga Hartarto said that President Jokowi is targeting more than 30 percent of the credit to finance MSMEs until 2024.

So far, the ratio of bank credit to MSMEs is at the level of 18-20 percent. This figure is far below the ratio of bank financing to MSMEs in Singapore (39 percent), Malaysia (50 percent), Thailand (51 percent), Japan (66 percent), and South Korea (82 percent).

Based on a survey from the Central Statistics Agency (BPS) last year, 69 percent of MSME actors need capital assistance because this sector is one of the victims most affected by the COVID-19 pandemic.