Government Encourages Increased Exports to Expand MSME Market

Jakarta – The government continues to encourage increased exports of Micro, Small, and Medium Enterprises (MSMEs) products as an effort to expand the market and increase the competitiveness of business actors at the global level. This step was taken considering the role of MSMEs as the backbone of the Indonesian economy, contributing more than 60% to the national Gross Domestic Product (GDP) and absorbing almost 97% of the workforce. To date, the number of MSMEs in Indonesia has reached more than 64 million business units.

The contribution of MSMEs to Indonesia’s national exports reaches around 15.7% of total exports. The government is committed to increasing this figure this year to support the export growth target of 9% in the next five years.

Coordinating Minister for Economic Affairs, Airlangga Hartarto emphasized the real steps that have been taken by the government to support MSMEs, one of which is through the policy of writing off debt and writing off collections in the first 100 days of President Prabowo Subianto’s administration.

“Under the leadership of President Prabowo Subianto in the first 100 days, one initiative has been carried out, namely debt write-off and debt collection as a support for MSMEs, and from the monitoring, the most debt write-offs were from Bank BRI. Well, of course this is an achievement that is the government’s commitment to the community,” he said.

Furthermore, Coordinating Minister Airlangga stated that the government will provide interest subsidies of up to 5% for investment credit taken by MSMEs in labor-intensive sectors, such as textiles, garments, footwear, food and beverages, and furniture. This step is expected to increase the production capacity of MSMEs for export.

As part of the strategy to increase MSME exports, the government has formed a National Export Enhancement Task Force, supporting Ultra Micro (UMi) financing, People’s Business Credit (KUR), and the PNM Mekaar and PNM Ulaam programs. In addition, the Export Import Financing Institution (LPEI) is tasked with providing working capital needs specifically for exports, as well as facilitating guarantees and insurance for MSMEs.

The government also provides Import Facility for Export Purposes (KITE) in the form of exemption from VAT and import VAT for export-oriented MSMEs. In addition, empowerment of intangible assets such as land certificates, Intellectual Property Rights (HAKI) certification, and halal certification are also part of efforts to increase MSME access to formal financial services.

The Proudly Made in Indonesia (BBI) Program, PaDi UMKM, and National Online Shopping Day (Harbolnas) continue to be promoted as strategies to increase demand for MSME products domestically. These programs will be re-encouraged ahead of Eid al-Fitr to significantly encourage MSME growth.

“I hope that MSMEs can grow, and the Coordinating Ministry for Economic Affairs will continue to provide guidance so that MSMEs can move up a class. Every year we hope that at least 20 MSMEs can graduate to become resilient medium-sized businesses,” concluded Coordinating Minister Airlangga.