Head of the Financial Sector Policy Center of the Fiscal Policy Agency Adi Budiarso stated that several MSMEs were facing difficulties in financing. Hence, the government decided to encourage various efforts to increase financial inclusion among MSMEs, including through financing by fintech.
"This is one of our strategies. The presence of fintech is indeed a disruption for the financial sector, but with its advances in technology, fintech also offers convenience and opportunities for financing needs, especially for MSMEs," he remarked during the Minister of Finance and Central Bank Governors Meeting (AFMGM) in Jakarta, Tuesday.
Budiarso affirmed that the government is strengthening the role of fintech through Law Number 4 of 2023 on the Development and Strengthening of the Financial Sector (UU P2SK).
The law regulates the implementation of technological innovation in the financial services sector (ITSK), especially regarding the mechanism for providing ITSK, regulations related to aspects of risk management, and a better ITSK governance to protect consumers, he elaborated.
He explained that fulfilling access to financing for MSMEs is one of the biggest challenges faced by Indonesia. It is because financing loans targeting new MSMEs only cover 20 percent of the total bank loans.
Meanwhile, MSMEs contribute significantly to the gross domestic product (GDP) that had reached 60.3 percent in 2022. MSMEs were also able to absorb 97 percent of the workforce in Indonesia, Budiarso pointed out.
Hence, the government and related authorities are striving to increase the portion of MSMEs loans to 30 percent in 2024, he remarked.
As an effort to encourage the growth of MSMEs, the government had also provided various credit programs for MSMEs, such as people's business loans (KUR) and ultra-micro financing (UMi), he remarked.
According to Budiarso, KUR realization in the first semester of 2023 was recorded at Rp126.3 trillion, with a total of 2.3 million debtors.
Meanwhile, the realization of UMi financing, through the Ministry of Finance's Government Investment Center (PIP), until June 2023, had reached Rp2.33 trillion, with 568,574 debtors.
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Translator: Imamatul Silfia, Resinta S
Editor: Azis Kurmala
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