MSMEs Encouraged to Upgrade to Face 2026, Focuses on Capacity Building and Digitalization

JAKARTA – The government continues to strengthen the role of micro, small, and medium enterprises (MSMEs) as the main driver of national economic growth in 2026. Through strengthening business capacity and accelerating digitalization, MSMEs are encouraged to upgrade to become more competitive, sustainable, and integrated into the formal economic ecosystem.

Minister of Micro, Small, and Medium Enterprises (MSMEs), Maman Abdurrahman, emphasized that the MSME sector has a significant contribution to the national economy, contributing around 55–60 percent of gross domestic product (GDP) and absorbing up to 95 percent of the workforce. However, significant challenges remain, particularly the dominance of the MSME workforce in the informal sector.

“The majority of MSME workers are still in the informal sector. It is the government’s responsibility to encourage their transformation to the formal sector to ensure more sustainable social protection and security,” said Maman.

According to Maman, another major problem is the lack of integration of MSME data across agencies, which often results in suboptimal implementation of policies. To address these challenges, the Ministry of MSMEs is developing a digitally integrated data system called Sapa UMKM, which is targeted to be fully operational by December.

“Through this system, all MSME data will be connected and updated daily, so that government policies can be more measurable and targeted,” he said.

This strengthening of digitalization is accompanied by collaboration across ministries and agencies, particularly to accelerate the licensing and business certification process. Certification is considered key to increasing MSME competitiveness in national and global markets.

Meanwhile, Riza Damanik, Deputy for Micro Enterprises at the Ministry of MSMEs, stated that throughout 2025, the government recorded strategic achievements that will lay a strong foundation for MSME acceleration in 2026. By the end of 2025, more than 14.66 million MSMEs had successfully transformed from the informal to the formal sector. Furthermore, 6.5 million MSME products had received halal certification, and more than 1 million micro-enterprises had obtained SNI certification.

In terms of financing, the realization of People’s Business Credit (KUR) reached IDR 257.9 trillion, with 60.8 percent disbursed to the production sector. This disbursement has the potential to create up to 11.6 million jobs.

Entering 2026, the government ensures that policy acceleration will continue to be strengthened through business capacity development, expansion of productive financing, marketing digitalization, and strengthening partnerships and supply chains.

“We will continue to promote an integrated approach so that MSMEs not only survive but also grow, become a major pillar of national economic growth,” Riza concluded.

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