PASURUAN | The enactment of Law Number 1 of 2016 on Guarantees will bring fresh air to Micro, Small, Medium Enterprises, and Cooperatives (UMKMK) in Indonesia. In addition to gaining easier access to financing, UMKMK will also benefit from easier consultation and business management.
Thus, a member of the Indonesian House of Representatives (DPR RI) from the Golkar Party, Mukhamad Misbakhun, considers the ratification of Law Number 1 of 2016 on Guarantees as a realization of an economic independence program.
"The Guarantee Law serves as a legal umbrella for UMKMK, which has long struggled to access credit, whether from banking or non-banking sources," explained Misbakhun in a press release to Kompas.com on Sunday (22/5/2016).
The politician from Pasuruan explained that with the Guarantee Law, UMKMK actors could fully utilize the resources and infrastructure provided by the government to enhance and develop their businesses.
"This aligns with President Jokowi-JK’s vision of economic independence, where the state must pay attention to the business sector, especially UMKMK," he stated.
Misbakhun mentioned that, in the future, the Guarantee Law could encourage the role of banking intermediation, both conventional and sharia-based. This means that, in addition to helping UMKMK access financing, guarantee activities can also support consulting and management services for UMKMK.
He also explained that within Indonesia's economic structure, UMKMK holds significant potential, with approximately 57.9 million business units in 2013.
The majority of UMKMK activities involve farmers, fishermen, livestock breeders, miners, artisans, traders, and providers of various services for the people.
However, despite the large number of business units, many prospective UMKMK entrepreneurs have yet to gain access to capital from banks.
"Out of the 57.9 million business units, only about 39.18 percent or 22.15 million have received credit facilities from banks. Meanwhile, the remaining 34.38 million units have not yet gained access to capital from banks," he revealed.
He stated that business capital is a highly significant factor in promoting the empowerment of UMKMK. (source: kompas.com)