"Several incentives have been provided for MSMEs in a bid to eradicate poverty, promote economic equality, and create jobs," the government stated in "The 2020 Annual Report, First Anniversary of the Jokowi-Ma'ruf Amin Administration: Rise for Advanced Indonesia" published here on Tuesday.
The government views MSMEs as an important sector that should be supported to help boost the nation’s economy.
Nearly 99 percent of the business entities in Indonesia are MSMEs, whose contribution to the gross domestic product reaches 60.8 percent while contribution to employment touches 97 percent.
At the end of June, the government had allocated Rp4.2 trillion through an online loan facility program called DigiKU or Digital MSME Credit.
Based on data from the Ministry of Cooperatives and MSMEs quoted in the 2020 Annual Report, digitization of some 1.6 million MSMEs was achieved from the government's target of two million.
In addition, total distribution of the people's business credit (KUR) touched Rp107.28 trillion, with the total number of debtors reaching 3.17 million, while the distribution of ultra-micro credit reached Rp4.85 trillion, with 1.5 million debtors.
On the other hand, under the Mekaar financing and supporting program, the government disbursed Rp11.2 trillion, with total debtors reaching 6.57 million.
Apart from incentives, the government also made it easier for MSME players to run their businesses through the Job Creation Law aimed at developing a competitive investment climate and creating jobs.
Two types of permits will be facilitated and granted at once, with the first being licensing as a permit for the establishment of business registration, and secondly, licensing pertaining to the distribution permit certification and halal certification for products that require such certification and will be subsidized by the state.
In addition, through the Job Creation Law, the establishment of a limited liability company for the MSME sector can be applied by one person instead of at least two individuals as stipulated in the old regulations.
"This regulation also provides facility for the licensing process of MSMEs," the report stated. Related news: Government holds online halal products' management training for MSMEs
Related news: Observer: Job creation law simplifies obtaining of permits for MSMEs