The push is aimed at strengthening the legal status of micro firms so they can more easily access credit, markets and government programmes.
The policy reflects a broader strategy to improve business legality, financing and market access for micro enterprises, said Riza Damanik, deputy for Micro Enterprises at the Ministry of Micro, Small and Medium Enterprises (MSMEs).
Formalisation, he said, is expected to improve data accuracy, policy targeting and resilience among small businesses that dominate Indonesia’s economic landscape.
The ministry said product standardisation has also accelerated, with 6.5 million products securing halal certification and more than one million micro businesses obtaining Indonesian National Standard (SNI) certification.
These measures are intended to boost compliance, consumer trust and competitiveness, particularly as micro firms seek to enter modern retail chains and digital marketplaces.
State-backed micro lending under the People’s Business Credit (KUR) scheme reached Rp257.9 trillion as of Dec. 11, benefiting 4.38 million borrowers, the ministry said.
About 60.8 percent of the financing was channelled to productive sectors such as agriculture, manufacturing and services, exceeding annual targets.
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The ministry estimates the financing could support the creation of between 7.7 million and 11.6 million jobs nationwide.
Beyond KUR, the government is expanding alternative financing schemes that allow micro businesses to use land certificates, invoices, purchase orders and intellectual property as collateral.
The approach is intended to address long-standing barriers to credit faced by enterprises without conventional assets or formal banking histories.
Market access has also been widened through partnerships and government programmes. The ministry said 2,804 micro enterprises joined business partnerships valued at Rp29 billion in letters of intent, while 12,740 MSMEs participated in the free nutritious meals programme.
Looking ahead to 2026, the government plans to accelerate reforms to help micro enterprises scale up sustainably through stronger legal status, wider productive financing, digital marketing and deeper integration into national supply chains.
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Translator: Martha Herlinawati Simanjuntak
Editor: Rahmad Nasution
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