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Jakarta Post

Lack of funding access hampers SMEs’ contribution to Indonesia’s exports

  • Riza Roidila Mufti
    Riza Roidila Mufti

    The Jakarta Post

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Jakarta   /   Wed, August 7, 2019   /  01:58 pm
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Small and medium enterprises participate in an exposition at the Jakarta Convention Center. The Indonesian Export Financing Agency is seeking to issue debt paper to partially finance the SMEs.(Kompas/Heru Sri Kumoro)

Despite being large in number, small and medium enterprises (SMEs) contribute only a tiny fraction of the country’s total exports as the businesses struggle with various issues, from financing to access to global markets. Indonesia's approximately 62.9 million SMEs play a huge role in the country’s economy as they accounted for 99.9 percent of total businesses in 2017. However, they contributed only 14.17 percent, equivalent to Rp 298.2 trillion (US$20.8 billion) of national non-oil and gas exports that totaled Rp 2.104 quadrillion in 2017. This share was slightly down from the 14.38 percent recorded in the previous year, according to the SMEs Ministry. The lack of access to financing played a big role in the low contribution and productivity of SMEs in national exports, said National Industry and Economic Committee (KEIN) deputy head Arief Budimanta. &ld...