Indonesia looks to improve MSME support system with new database

An integrated Micro, Small, and Medium Enterprises (MSMEs) database is being created to link ministries, institutions, and regional governments.
By: | May 25, 2022

This was disclosed by Ahmad Dading Gunadi, MSMEs and Cooperatives Development Director of the National Development Planning (PPN) Ministry/National Development Planning Agency (Bappenas).

During a G20 side event webinar, he said, “One of the MSMEs’ issues is the database that is still not integrated between several ministries, institutions, and regional governments. To this end, the government has been designing integrated MSMEs database development since last year by involving various ministries and institutions.”

The ministry has started gathering data related to MSMEs from all districts and cities in Indonesia until two years into the future.  In addition to data, MSMEs also encounter issues in the form of low cooperation with big businesses included within the global value chain. 

This is apparent from the data indicating that 93% of micro and small businesses are not involved in cooperation with big businesses and new MSMEs contribute 14% to Indonesia’s total exports. 

“Moreover, 88% of micro and small businesses cannot apply for banking credit,” Gunadi said. “As a result, banking credit distribution to new MSMEs only reaches around 20% from the total credit distribution or it has stagnated since 2014.”

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Some 94% of micro and small businesses have not yet used computers to run their businesses and 90% have not yet used the internet. The government continues to push the digitalisation of MSMEs, especially amid the pandemic, he said, according to Antara.