Government Continues to Encourage MSME Development to Accelerate Economic Equality
Jakarta – The government continues to encourage the development of Micro, Small, and Medium Enterprises (MSMEs) as an effort to accelerate economic equality in Indonesia. The contribution of MSMEs to the national economy is very significant, as evidenced by data from the Coordinating Ministry for Economic Affairs (2025) which states that this sector contributes more than 60% to Gross Domestic Product (GDP) and absorbs around 97% of the national workforce.
However, most MSMEs still operate informally and do not yet have a Taxpayer Identification Number (NPWP) or Business Identification Number (NIB). Deputy Minister of Cooperatives H Ferry Juliantono said that this condition is a major challenge in the development of small and medium enterprises. “Many MSME actors are still reluctant to formalize their businesses due to a lack of understanding of regional taxes and bureaucracy which is considered complicated. In fact, with clear legality, they can get various funding and business development facilities,” he said.
To answer these challenges, the government prioritizes an empowerment-based approach so that MSMEs voluntarily enter the taxation system and benefit from applicable regulations. One concrete form of this effort is the establishment of the Ultra Micro Holding (UMi) led by PT Bank Rakyat Indonesia (Persero) Tbk (BRI), by collaborating with PT Permodalan Nasional Madani (PNM) and PT Pegadaian. BRI President Director, Sunarso, emphasized that the presence of the UMi Holding has had a positive impact on improving people’s standard of living. “This synergy allows MSMEs to gain wider and easier access to capital, so that they can develop and contribute more to the national economy,” he explained.
The Coordinating Minister for Community Empowerment, Muhaimin Iskandar, also highlighted the importance of cross-sector collaboration in developing MSMEs. “The success of community economic empowerment cannot be achieved partially. Synergy between the central government, regional governments, BUMN, and the private sector is the main key so that MSMEs can move up a class and develop in a sustainable ecosystem,” he said.
As a concrete step, the regional government has begun to roll out additional incentives for MSMEs that have formalized their businesses. These incentives include financial management training programs, marketing strategies, business digitalization, and access to funding and investment. With ongoing training programs and cooperation with the private sector, MSMEs are expected to be more competitive and highly competitive in local and global markets.
Through these various initiatives, the government is optimistic that strengthening the MSME sector can be the main driver in economic equality and poverty alleviation in Indonesia. “With a supportive ecosystem and policies that favor MSMEs, we can create more inclusive and sustainable economic growth,” concluded Muhaimin. []
