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Micro-megasized: Small enterprises to be massed into ‘holding company’ for global scale
The contribution of MSMEs to the gross domestic product (GDP) is expected to increase from 61 percent next year to 65 percent by 2024.
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Small and medium enterprises (SMEs) participate in an expo at the Jakarta Convention Centre in Jakarta. (Kompas/Heru Sri Kumoro)
T
he government has prepared a five-year road map to nurture the development of Indonesia’s micro, small and medium enterprises (MSMEs) with the principal aim of improving their ability to export products.
According to the road map, the government aims to increase MSME exports from 18 percent in 2020 to 30 percent by 2024. The contribution of MSMEs to the gross domestic product (GDP) is also expected to increase from 61 percent next year to 65 percent by 2024.
Speaking at a national gathering of waqf microbanks in Jakarta, President Joko “Jokowi” Widodo expressed his desire to see the country’s MSMEs clustered into a larger group in order to achieve the economic scale required to access the global market.
“I have already seen the establishment of business clusters. As I said to the Coordinating Economic Minister [Airlangga Hartarto], the clusters need a bigger umbrella akin to a holding company so that going forward we have a corporation of MSMEs that can easily access national and global marketplaces,” Jokowi said in Jakarta on Tuesday.
He added that the government wanted to empower the MSMEs to grow and that he was regularly monitoring updates from the microloan schemes currently in operation.
According to data from the Cooperatives and Small and Medium Enterprises Ministry, 63.35 million businesses were categorized as micro businesses last year. Micro businesses are those with less than Rp 50 million (US$3,570) in assets and less than Rp 300 million in annual revenue. The figure represented 98.68 percent of total businesses in the country.
Only about 5,550 businesses were categorized as big businesses with more than Rp 10 billion in assets and more than Rp 50 billion in annual revenue, representing only 0.01 percent of total businesses in the country.
