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Govt continues supporting MSMEs recovery from pandemic
The government has pledged its commitment to strengthening micro, small and medium enterprises (MSMEs) to aid their recovery after the negative impact of the pandemic.
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Still struggling: Yaurohmi Fauzanah, an employee of Santishop Manufacture Indonesia UKM, makes a hazmat suit in Bantul on March 28. (JP/ Bambang Muryanto)
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he government has pledged its commitment to strengthening micro, small and medium enterprises (MSMEs) to aid their recovery after the negative impact of the pandemic. Financial assistance has been prepared in the form of the national economic recovery (PEN) incentives, initial working capital aid for SMEs, the MSME digitalization program and access to capital through its microcredit program. This has been the government’s real presence in boosting MSME empowerment and recovery.
“The pandemic, which first emerged in early 2020, has caused severe damage to various sectors, including the economic. Some of the biggest impacts were felt by businesspeople, where MSMEs have been hit massively,” Communications and Information Technology Minister Johnny G. Plate said.
The government assessed that saving MSMEs would be pivotal for the country’s economy. It has been estimated that 87.5 percent of Indonesian MSMEs have been impacted by the pandemic. According to Indonesian Employer Association (APINDO) labor affairs deputy chair Bob Azam, approximately 50 percent of the total number of Indonesian MSMEs were close to closing their businesses due to COVID-19.
He went on to say that had this happened, the domino effect would have also hit employees, lenders, borrowers and other related stakeholders. To prevent this, the government has continuously devised business empowerment and recovery strategies. Among these strategies has been the provision of productive financial assistance for the micro-sector by increasing access to working capital through its microcredit program and other related empowerment strategies.
These programs have eased the economic impact of the pandemic on MSMEs by supporting and strengthening working capital, providing financial stimulus and boosting MSMEs’ digital transformation.
“The government is fully committed to supporting MSMEs to survive and grow amid the pandemic. We are also expecting everyone to take a proactive role in helping our MSMEs, like purchasing local products,” Johnny said.
