Facilitating access to finance to help MSMEs thrive: Minister

CLATON, CENTRAL JAVA (ANTARA) – One of the efforts to promote the progress of micro, small and medium enterprise (MSME) players is to facilitate their access to finance, said Minister of Cooperatives and Small and Medium Enterprises Teden Mastuki.

According to him, the State-Owned Banks Association (HIMBARA) should be proactive in providing financial support. Additionally, the approach of getting loans using collateral is no longer applicable to MSME players.

„This method is no longer used abroad. They use a credit scoring scheme to assess whether an MSME is eligible for financing,” he said here on Tuesday.

He made the statement at the launch of an event titled “Acceleration of Extreme Poverty Alleviation in the Sector of Cooperatives and MSMEs”.

Masduki said President Joko Widodo’s target of 30 percent bank lending to MSMEs by 2024 could be realized if there was a major shift in credit policy.

Related news: Create jobs to reduce extreme poverty: Minister

The Ministry of Cooperatives and SMEs continues to make efforts to help MSMEs access finance easily, including through cooperatives to integrate with small farmers who own less land.

Cooperatives act as off-takers or suppliers to industries or markets engaged in linking farmers to the financing sector, such as banks.

„Banks, including those in Ciwidey, have entered into financing with co-operatives because, after all, banks prefer to enter if the potential ratio of non-performing loans (NPL) is small,” he said.

Easing access to finance will help MSMEs develop, create more employment opportunities and support poverty alleviation in various regions, he added.

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Currently, MSMEs account for 99 percent of all business sectors in Indonesia, while corporations or conglomerates account for only 0.01 percent. However, the share of bank credit extended to small businesses is only about 21 percent.

„Our MSMEs provide 97 percent of national employment and have great resilience. Now, what we need to do is to strengthen our MSMEs,” the minister said.

Related news: Govt steps up partnership between MSMEs and large industries

Translated by: Maria Cecilia, Raga Adji
Presenter: Zafar M Siddiqui
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