– Deputy Chairman of DPD Sultan B Najamudin encouraged the monetary authority of Bank Indonesia (BI) and the Financial Services Authority (OJK) to compile technical guidelines related to bank financial institution financing for micro, small and medium enterprises (MSMEs).

This was conveyed by the former chairman of the Bengkulu HIPMI in response to a statement by the Indonesian Minister of Cooperatives and SMEs regarding the difficulties of MSME business actors in accessing financing at financial institutions due to collateral requirements.

“Financial institutions, especially state-owned banks, should have a risk management review that needs to be submitted to the government, if there are objections to following up on the regulation of the coordinating minister for the economy sector Number 1 of 2022. Banking certainly needs legal certainty and technical guidelines from the financial authorities,” said the Sultan, Tuesday 13 June 2023 .

Also Read: DPR Encourages MSMEs to Keep Growing and Upgrading

According to him, MSMEs are a critical engine for the Indonesian economy, where the contribution to the Gross Domestic Product (GDP) reaches 61% with employment reaching 97% of the total national employment absorption.

“However, MSMEs’ access to bank financing in Indonesia is still low compared to neighboring countries. The portion of credit to MSMEs is currently only around 21 percent,” Sultan said.

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Meanwhile, based on Bank Indonesia’s records, lending to MSMEs only grew by around 6.6% YoY in April 2023 or around IDR 1,274.8 trillion, after growing 8.5% YoY in the previous month. Meanwhile, the gross non-performing loan (NPL) ratio was 2.49% and 0.72% net, down compared to the position at the beginning of the year.

“BI and OJK must have legal breakthroughs that can guarantee banks are willing to finance MSMEs with certainty of entry into a large business ecosystem. So that banks can force large business actors to attract MSMEs into their business supply chain as a condition for obtaining financing,” he said.

So far, the corporate actions of large companies have not involved many MSMEs. Although the Government has encouraged a partnership between the two.

It is known, the Minister of Cooperatives and SMEs Teten Masduki asked banks to facilitate access to financing for MSMEs. According to him, banks are still asking for collateral or additional guarantees from MSMEs for loans under IDR 100 million.
Even though in the Regulation of the Coordinating Minister for the Economy Number 1 of 2023 concerning Guidelines for KUR Implementation, loans under IDR 100 million do not require additional collateral. In practice, Teten calls this nonsense. ()

By Chavez

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