The Jakarta Post
Bank Indonesia (BI) is looking to double the use of the Quick Response Indonesia Standard (QRIS) among small businesses, as it bids to boost cashless payments and to speed up the national economic recovery.
BI Governor Perry Warjiyo said on Monday that the central bank aimed to expand the use of QRIS to around 12 million micro, small and medium enterprises (MSMEs) this year from 5.8 million last year. The move is expected to support the recovery of the coronavirus-battered economy.
“MSMEs’ digitalization will help them advance to the next level and become a greater support for our economy,” the governor said during the launch of the 2021 national movement of BanggaBuatanIndonesia (Proud of Indonesian-made Goods).
Aiming to universalize cashless payments in the country, BI launched the QRIS code system in 2019 to enable users from one payment service to transfer funds to any rival service within BI’s ecosystem.
Meanwhile, the coronavirus pandemic drove the Indonesian economy last year into its first recession since the 1998 Asian financial crisis.
MSMEs, which contribute around 60 percent of the country’s gross domestic product (GDP) and employ the majority of the labor force, have been particularly hit hard by the pandemic as the slowing economic activity has slashed their revenues.
The central bank governor also highlighted MSMEs’ digitalization as one of the three key factors in supporting local businesses.
“Synergy between stakeholders, innovation, creativity and digitalization will be the key to ensuring MSMEs success in becoming the main source of economic growth,” Perry said.
A Mandiri Institute study last year showed that digitalized MSMEs could help Indonesia reduce 1.5 percent of the economic burden on its GDP caused by the COVID-19 pandemic.
The central bank also encourages further collaboration between banks and financial technology companies to digitalize the country’s payment system, Perry said, adding that it is currently establishing the so called BI Fast Payment to accelerate payment transactions.
Speaking during the same event, Bank Central Asia (BCA) president director Jahja Setiaadmadja echoed the sentiment, stating that MSMEs played a key role in the national economy.
The bank is committed to supporting MSMEs through training and development programs, he said.
“We will also support MSMEs with loan programs to help them get access to financing, as well as providing them with payment infrastructure to facilitate their businesses,” he added.
Meanwhile, MSMEs might also get a boost from improved consumer sentiment on the outlook for the economy in December.
According to the consumer confidence index (IKK) survey conducted by BI, consumer confidence rose to 96.5 in December from 92 in November driven by a better outlook on job availability and income growth despite a continuing surge in coronavirus cases. An IKK value above 100 reflects general hopefulness, while a value below 100 signifies pessimism.
“The perception of economic conditions improved, supported by job availability, income growth and higher confidence in purchasing durable goods,” BI said in the survey.
However, business players are of the view that the government’s decision to reimpose large-scale social restrictions (PSBB) in Java and Bali starting on Monday until Jan. 25 to slow the raging coronavirus outbreak is likely to again hold up economic recovery.
The measure will further limit the public activities of more than 140 million people, requiring 75 percent of employees to work from home and businesses and public places to limit their occupancy and operational hours.
Indonesia recorded more than 836,000 virus cases as of Monday with daily confirmed cases reaching 8,692 cases, the worst outbreak in Southeast Asia.
Indonesian Chamber of Commerce and Industry (Kadin) deputy chairwoman Shinta Kamdani said on Jan. 7 that while business players understood the necessity for controlling the pandemic, the restrictions would be only a short-term measure and would be counterproductive for the economic recovery.
“The PSBB will definitely hamper the business recovery, especially on the island of Java, as the epicenter of the Indonesian economy,” she told The Jakarta Post. She expected the measure to particularly impact the retail, transportation, food, trade, accommodation and aviation sectors.