JAKARTA. Ministry of Cooperative and Small Medium Enterprises recorded an increase in the number of micro, small, and medium enterprises (MSMEs or UMKM) from 57 million in 2014 to 58 million in this year.
Being entrepreneur is likely to become a trend among young generation. The youths are proud to be independent and be able to create job opportunities, despite they are categorized as MSMEs. MSME become more attractive as the sector has been proven to be stable during economic crisis and slower economic growth.
MSMEs also have significant contribution to domestic economic growth. According to Indonesian Chamber of Commerce and Industry, the contribution of MSMEs to Gross Domestic Product (GDP) has increased from 57.84% to 60.34% during the recent five years. During the same period, the employment absorption rate of this sector has increased from 96.99% to 97.22%.
Chairman of Indonesian MSMEs Association (Akumindo) M. Ikhsan Ingratubun said that the sector has become a pillar amid weak economic growth in I this year. This sector even will remain playing major role in sustaining the economy in 2017.
“Besides being able to absorb employments, the MSME sector is also able to survive during the economic slowdown,” he told KONTAN, Thursday (29/12). Evidently, the number of MSMEs has been growing. The business variants of this sector also continue to develop, not only in the food business but also to the creative industry with the advent of startups in financial technology.
However, Akumindo assessed that government needs to be more supportive to the sector, mainly in terms of alignment, protection, certainty and economic opportunities. For an example, the government needs to have different treatments for large-scale and small-scale food industries in terms of export-import licensing and occupancy cost.
Tax amnesty program is also a burdensome for MSMEs in certain cases. For an example, the MSMEs have to spent equal tax consultation costs with major entrepreneurs. No wonder, many MSMEs were struggling to join tax amnesty program.
MSMEs are also facing some problems related to capital, export market access, and licensing.
Expert of marketing and creative economy at University of Padjajaran Popy Rufaidah said, MSMEs need to be supported to develop their business. The recent economic slowdown has brought negative impacts to MSMEs, mainly those that depend on import materials. MSMEs have also been hit by imported goods of foot wear, textile, and culinary with the cheap prices.
Indeed, people’s business credit (KUR) has facilitated the access to capital. However, this credit allocation has often missed the target. (Muhammad Farid/Translator)