By: Aristika Utami
Micro, Small, and Medium Enterprises (MSMEs) have long been known as the backbone of the Indonesian economy. This sector not only contributes greatly to the gross domestic product (GDP), but also has a very important role in creating jobs and reducing poverty levels. In this context, investment in the MSME sector is very crucial to encourage increased economic welfare of the community.
The MSME sector in Indonesia is one of the main pillars of the economy. Based on data from the Ministry of Cooperatives and SMEs, around 99% of business units in Indonesia are MSMEs. In addition, MSMEs also absorb more than 97% of the workforce in Indonesia, making it a very vital sector in creating jobs. The contribution of MSMEs to Indonesia’s GDP is also quite significant, which is around 60% to 70%. With this great potential, the existence and sustainability of MSMEs greatly affect the stability of the national economy.
However, despite their large contribution to the economy, many MSMEs have not yet developed optimally. This is due to various factors, such as limited access to financing, lack of knowledge about technology, and difficulty in reaching a wider market. Therefore, investment in the MSME sector is important to increase their business capacity, which will ultimately have an impact on improving the welfare of society as a whole.
Deputy Chairman of the Indonesian Chamber of Commerce and Industry (Kadin), Yukki Nugrahawan Hanafi, said that during the first semester of 2024, investment in the MSME sector reached IDR 127 trillion and succeeded in creating 4.6 million jobs. The achievements of MSMEs also increase the economic welfare of the community.
Investment in the MSME sector is a very important solution. This investment is not only related to the provision of capital, but also includes various other aspects, such as training, capacity building, and network development.
In encouraging MSMEs to succeed in the global market, PLN provides export training to 107 MSME players so that fostered partners can penetrate the international market. The training was conducted six times online in August-September 2024 with material exploring the potential of Indonesian MSMEs in the markets of various countries (India, Australia, Hong Kong, Egypt, Taiwan, and Japan) and a guide to preparing MSMEs to penetrate the export market.
PLN President Director, Darmawan Prasodjo said one of PLN’s missions is to play a role in the economic growth of the community, one of which is through the development of MSMEs. As a driver of the economy, PLN wants to continue to expand the reach of the MSME market and have competitiveness up to the international level.
Investing in MSMEs will give them access to the capital needed to grow their businesses. With capital, MSMEs can purchase raw materials, expand production capacity, and improve product quality. This will allow them to compete in a wider market and increase their income.
With the availability of business capital, MSMEs can also create new jobs for the surrounding community, which in turn will increase family income and encourage local economic growth. Through various financing programs, including People’s Business Credit (KUR) and Ultra Micro Financing (UMi), the government encourages increased access to financing for MSMEs that have great potential in creating jobs and improving community welfare.
Head of Subdirectorate of Credit Program and Other Investments, Directorate of Investment Management System, Directorate General of Treasury (DJPb) Ministry of Finance, Darta said that KUR program continues to play an important role in expanding access to financing and increasing the competitiveness of MSMEs throughout Indonesia. With interest rates that remain competitive, namely 6% per year and 3% for special programs, we hope that KUR can continue to drive economic growth and create more jobs
Investments can also focus on human resource development (HRD) in the MSME sector. By providing appropriate training and education, MSMEs can gain the skills and knowledge needed to better manage their businesses.
Investment in human resource development will increase the competitiveness of MSMEs, which will ultimately have an impact on increasing the income and welfare of business actors.
In this digital era, technology is the main key in business development. Therefore, investment in technology and innovation for MSMEs is very important. By utilizing technology, MSMEs can optimize production processes, increase efficiency, and reduce operational costs.
MSMEs can also utilize e-commerce and social media platforms to market their products at lower costs and more efficiently. Investment in innovation and technology will open up opportunities for MSMEs to grow and compete with large companies.
The right investment in the MSME sector will increase the competitiveness of business actors at the local, national, and international levels. With increased competitiveness, MSMEs will be able to expand their market share and increase their contribution to the economy. In addition, the development of MSMEs will also encourage regional and national economic growth, because this sector will absorb more workers and create new business opportunities.
Investment in the MSME sector not only provides direct benefits for business actors, but also contributes to improving the economic welfare of society as a whole. Therefore, the government, private sector, and society must work together to encourage investment in the MSME sector as a strategic step to improve the economic welfare of society and achieve inclusive and sustainable development.
)* Public Observer
