"One Million MSMEs Targeted to Level Up by the End of 2019 with Full Support from Guarantee Companies"
Makassar | Jamkrindo
The weakening of the rupiah exchange rate against the US dollar has significantly impacted micro, small, and medium enterprises (MSMEs). The Ministry of Cooperatives and SMEs of the Republic of Indonesia stated that turnover in this sector has decreased by an average of 15%. Guarantee companies are expected to back up MSMEs through capital guarantee schemes so that the government’s target of 200,000 MSMEs "leveling up" this year can be achieved.
"The impact of the rising dollar on MSMEs is currently being evaluated. Most businesses that rely on imported raw materials have seen their turnover drop by 15%," said Braman Setyo, Deputy for Business Development and Restructuring at the Ministry of Cooperatives and SMEs, during the "Level-Up MSMEs Partner Meeting" event themed "Improving the Competitiveness of MSMEs in Facing the ASEAN Economic Community (AEC)" at the Celebes Convention Center, Makassar, on Wednesday (August 26, 2015).
Nevertheless, the weakening of the rupiah is considered not too disruptive to the government's policy, which targets one million MSMEs to "level up" by the end of 2019. Various policies have been prepared to anticipate the fluctuations in the rupiah, including boosting the distribution of People’s Business Credit (KUR), which has been ongoing since July 18.
The government itself is targeting the disbursement of IDR 30 trillion in KUR this year. With this access to capital support, the position of MSMEs will undoubtedly strengthen.
"As of August 26, KUR disbursement has reached IDR 205 billion. Therefore, we are optimistic that MSMEs will grow and remain resilient in facing rupiah fluctuations," said Braman Setyo.
Other strategic measures that support the growth and competitiveness of MSMEs, enabling them to withstand currency volatility and the 2015 ASEAN free market, include:
- Reducing KUR interest rates from 22% in previous years to 12%.
- Encouraging 515 regencies/cities across Indonesia to issue Micro and Small Business Licenses (IUMK).
- Providing mentorship to MSMEs by deploying 10,000 mentors.
- Offering fast and free intellectual property services for MSME products.
- Granting access to capital with the full support of guarantee companies.
"It must be remembered that 40% of MSME problems are related to capital, and we need Perum Jamkrindo and Asippindo to provide guarantees for MSMEs," added Braman Setyo, who also serves as Chairman of the Supervisory Board of Perum Jamkrindo.
Meanwhile, Diding S. Anwar, President Director of Perum Jamkrindo, stated that the company is ready to support the KUR program’s success. According to him, Perum Jamkrindo has targeted a guarantee volume of IDR 81.78 trillion this year, including half of the IDR 30 trillion KUR guarantee, which will be backed by Indonesia's only state-owned guarantee company.
Previously, at the State Palace, Vice President Jusuf Kalla encouraged banks not to hesitate in distributing KUR. He emphasized that the high Non-Performing Loan (NPL) rate in this business could be mitigated by the support of guarantee companies, namely Perum Jamkrindo.
(team)