OJK Brings Bad News, PPKM Extension Hits MSME Business Activities

Chief Executive of the Capital Market Supervisory Financial Services Authority Hoesen (Photo: screenshot of OJK Youtube)

JAKARTA - Chief Executive of the Capital Market Supervisory Financial Services Authority (OJK) Hoesen said the COVID-19 pandemic, which has been going on since early 2020, has hit the business continuity of micro, small and medium enterprises (MSMEs) in Indonesia enough.

According to him, based on a survey published by the Asian Development Bank (ADB) in July 2020, it showed that the impact of the pandemic had forced 50 percent of MSMEs to close their businesses.

Then, 88 percent of micro-enterprises do not have cash or savings or run out of financial financing. Then, 60 percent of micro-enterprises reduce labor.

"This condition continues until now," he said in the webinar Securities Crowdfunding: Alternative Funding for MSMEs which was held on Tuesday, August 3.

Hoesen added, the latest developments with the government policy regarding the establishment of the Implementation of Community Activity Restrictions (PPKM) since July 3 and extended until August 9, 2021 have made it more difficult for micro and small entrepreneurs.

"In fact (PPKM) has hit the business continuity of MSMEs in Indonesia at this time," he said.

Therefore, continued Hoesen, the government then gave support to this sector to be one of the priorities in the National Economic Recovery (PEN).

"Given the importance of the role of MSMEs in the national economy, OJK will always actively participate in realizing this mandate, including supporting government programs," he said.

This intention was then realized through the issuance of POJK Number 57/POJK.04/2020 concerning Public Offering of Securities Through Information Technology-Based Crowdfunding Services or what is often known as Securities Crowdfunding.

The scheme allows MSME players to conduct fund-raising activities in the capital market through the concept of offering securities.

As of the end of December 2020, the number of MSME publishers/actors who utilize Equity Crowd Funding (ECF) from 4 providers, has only reached 129 publishers (companies) with the amount of funds raised reaching Rp191.2 billion.

For information, the number of MSMEs currently reaches 64.2 million with a contribution to gross domestic product (GDP) of 61.07 percent or Rp. 8,573.8 trillion.

The contribution of MSMEs to the Indonesian economy includes the ability to absorb 97 percent of the total workforce and can collect up to 60.4 percent of the total investment.