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Micro enterprises aid halved for this year, but coverage to be expanded
The government is slashing the micro enterprise assistance by a half to Rp 1.2 million per recipient this year, but aims to reach a larger number of recipients than last year at 12.8 million by the third quarter of 2021.
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An official from Jakarta’s one-stop integrated service records the data of a kiosk owner in Tanah Tinggi on July 23. The Jakarta administration has relaxed permit requirements for small and medium enterprises (SMEs) that have been forced to cease operations because of the COVID-19 pandemic. JP/Seto Wardhana (JP/Seto Wardhana)
T
he government will halve working capital aid (BPUM) for micro enterprises this year while expanding coverage by 19 percent following budget cuts.
The Cooperatives and Small and Medium Enterprises (SMEs) Ministry has halved the aid to Rp 1.2 million (US$82.41) per recipient and plans to cover 2.4 million more micro enterprises than last year, bringing the total targeted coverage to 12.8 million by the third quarter.
As of April 1, the government had disbursed Rp 7.9 trillion to around 6.6 micro businesses, which are legally defined as those with asset values below Rp 50 million and annual revenues below Rp 300 million.
“The amount will be reduced because of budget constraints, among other considerations, so it will only be half,” ministry micro enterprise deputy Eddy Satriya said in a virtual presser on Tuesday.
The cuts will enable the ministry to meet the lower BPUM budget of Rp 15.36 trillion this year, down 30.18 percent from last year, during the height of the economic fallout from the COVID-19 pandemic.
Read also: Government disburses $163m for micro businesses
The changes to the BPUM follow several recent studies that show an ongoing financial fallout among Indonesia’s 64.19 million micro and small businesses that contribute over 60 percent of Indonesia’s gross domestic product (GDP) and employ 97 percent of the workforce.
