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Govt, private companies push for digital transformation of MSMEs
Indonesia’s micro, small and medium-scale enterprises contributed 61.4 percent to the country's GDP in 2017 and also absorbed 70 percent of the workforce.
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Initiators and participants of the Ayo UMKM Jualan Online (Let SMEs Sell on Line) movement pose for a photograph during the launch of the movement in April, 2018 (JP/Riza Roidila Mufti)
T
he government and private sector actors such as banks and financial start-ups are making fresh efforts to further promote the digitalization of micro, small and medium-scale enterprises (MSMEs), which have become the backbone of the country’s economy.
The Industry Ministry recently launched Startup4Industry, an application that gives MSMEs easier access to affordable and feasible technological solutions from technology start-ups.
The program is one of several initiatives taken by the ministry in pushing for the digital transformation of MSMEs, which, due to their weak financial and technological capacity, are still unable to take advantage of digital technology to boost their businesses.
“Through Startup4Industry, technology start-ups can provide MSMEs with digital technology to solve managerial, production and marketing issues,” Industry Minister Airlangga Hartarto said during the launch of the application in Jakarta on Aug. 30
Meanwhile, the ministry’s MSMEs Directorate General Gati Wibawaningsih said the ministry would also cooperate with Bank Indonesia (BI) to provide MSMEs with easier access to funding.
“The ministry is discussing with Bank Indonesia how to help MSMEs get easier access to bank loans,” Gati told reporters. She said the ministry and the central bank would seek other financial alternatives for MSMEs in addition to subsidized micro credit program (KUR) loans. “Hopefully, the new funding initiative can be launched soon,” she said.
MSMEs, which also include companies involved in industrial activities, have become the backbone of Indonesia’s economy. According to data provided by Statistics Indonesia (BPS), their contribution to the country’s GDP reached 61.4 percent in 2017 while they also absorbed about 70 percent of the country’s workforce.
