Trade Minister Lutfi Envy MSMEs In President Jokowi's Era: I Used To Want IDR 75 Million, I Had To Give A Guarantee Of 110 Percent Of The Loan Value

Minister of Trade, M. Lutfi. (Photo: Doc. Ministry of Trade)

JAKARTA - The Minister of Trade of the Republic of Indonesia, Muhammad Lutfi said that when he started his career as an entrepreneur, it was very difficult for him to access credit from banks because of the need to guarantee large assets. Meanwhile, currently micro, small, and medium enterprises (MSMEs) are very easy to get capital in the era of Joko Widodo (Jokowi) administration.

"When we become entrepreneurs, we want IDR 75 million to provide a guarantee of 110 percent, rather than the loan (value)", he said in a virtual discussion, Monday, June 14.

Therefore, Lutfi admitted that he was envious of the Jokowi Government's concern for MSMEs in Indonesia. Following the jumbo budget allocation of IDR 300 trillion for the People's Business Credit program managed by the Ministry of Cooperatives and SMEs.

Moreover, said Lutfi for MSME actors to access the KUR program without requiring any guarantees.

"Mr. Teten, as the Minister of Cooperatives, already has extraordinary budgetary power. Under him, there is IDR 300 trillion for KUR (People's Business Credit), namely people's business loans that do not require collateral", he said.

Furthermore, Lutfi said that due to the difficulty of obtaining loans from banks, the majority of MSME actors at the beginning became entrepreneurs, many prefer to access loans through non-banking institutions even though it is riskier.

"So, if we have 110 percent of the loan, we don't borrow it from the bank. But, it remains in the informal sector", he said.

The Ministry of Trade, said Lutfi, will continue to collaborate with the Ministry of Cooperatives to produce regulations relevant to the current situation. The goal is to strengthen the MSME business to the global realm.

"That's why Mr. Teten and I are working together, we have something to do. I want to improve the regulations so that the trade we do is not fraudulent, we cannot compete with an unbalanced situation. This is a disruption breakthrough and is a new opportunity, we must be strong", he said.