By: Ahmad Riady )*
President Prabowo Subianto’s government continues to demonstrate its commitment to supporting people-based economic growth. One concrete effort currently being designed is the formation of the UMKM Holding, an initiative aimed at strengthening the ecosystem of small and medium enterprises in Indonesia.
The plan to form this Holding was led by the Minister of Micro, Small, and Medium Enterprises (MSMEs), Maman Abdurrahman, who emphasized the importance of synergy between MSMEs and large industries as the driving force of the national economy.
Holding UMKM is designed to connect thousands of UMKM players with large industrial supply chains in a more structured and integrated manner. Through this approach, UMKM not only plays a supporting role, but also an integral part of the industrial ecosystem.
In this case, the government plans to provide various supports, including production training, access to financing, business planning, and easy access to markets and investors. This step is expected to overcome the challenges that MSMEs have faced so far, such as limited capital, marketing, and access to raw materials.
The government plans to make this holding an ecosystem that is able to create connectivity between the MSME sector and large industries in various sectors, such as automotive, agriculture, food and beverages, and crafts.
Minister Maman said that this model has proven successful in various countries, such as China, South Korea, and Japan, where MSMEs are an integral part of the supply chain of large industries. Thus, Indonesia is expected to be able to imitate a similar model to encourage collaboration-based economic growth.
The plan to form an MSME holding is also supported by the Ministry of State-Owned Enterprises (BUMN), especially through Bank Himbara which will help provide financing. In addition, several BUMN companies engaged in the manufacturing sector are also expected to act as a large umbrella in coordinating thousands of MSMEs that are members of this holding. This support shows a strong synergy between the ministry, BUMN, and business actors in realizing this great ideal.
Not only the government, a number of organizations such as the Indonesian MSME Association (Akumindo) also welcomed this plan positively. The Secretary General of Akumindo, Edy Misero, assessed that the formation of the MSME holding could open up new opportunities, both in shortening the supply chain and creating jobs. He is optimistic that this initiative will bring fresh air to MSME actors, while strengthening their position in the national economy.
Not only that, similar support also came from the Regional Representative Council (DPD) of the Republic of Indonesia. The Chairman of the DPD RI, Sultan B Najamudin, stated that the formation of an MSME holding with a community-based approach in the regions could have a significant impact on increasing business capacity and formalizing MSMEs in a structured manner. He also saw the potential of this holding in increasing the tax ratio as well as the competitiveness of local products in the global market.
However, the big step of establishing this UMKM holding is not without challenges. One of the main challenges is ensuring that there is a classification of business types and measurable mini-industrial areas. Sultan emphasized the importance of well-planned human resource management so that this holding can run effectively. In addition, the government also needs to ensure clear supporting regulations to strengthen the sustainability of this holding in the long term.
Even so, the government remains optimistic that the formation of this UMKM holding can be a milestone in encouraging UMKM to move up a class. With a consolidation target of up to 3,000 UMKM in one ecosystem, this holding is expected to be able to create a wider potential business space. This is also proof of the government’s seriousness in making UMKM the backbone of the national economy.
Furthermore, the establishment of this holding is also in line with the government’s major agenda to write off MSME receivables which is expected to be completed by mid-2025. After that, the MSME holding will begin to be rolled out gradually with full support from various parties, including banks and private companies.
The government is not only focusing on the financing aspect, but also on strengthening the capacity of MSMEs themselves. Intensive training, providing market access, and collaboration with large industries are some of the strategic steps that have been designed to ensure the success of this initiative. With an integrated approach, the MSME holding is expected to be able to create a mutually beneficial relationship between MSME players and large industries.
As an initial step, the government has begun to identify sectors that have great potential to be developed through this holding. The automotive sector, for example, is considered to have great potential to empower MSMEs in providing components and spare parts. In addition, the agricultural and food sectors are also the main focus, considering the large contribution of these two sectors to the national economy.
With this grand vision, President Prabowo’s government wants to ensure that MSMEs no longer run alone, but become part of an ecosystem that is interconnected and supportive. The MSME Holding not only aims to increase the competitiveness of small business actors, but also to create sustainable economic stability.
This plan reflects the government’s determination to bring Indonesia to a higher level in the global economy. With the support of various parties and a targeted strategy, the UMKM holding is expected to be a real step in creating economic equality and strengthening Indonesia’s position in the international arena.
Through this step, President Prabowo’s government shows that economic development is not only focused on a large scale, but also on empowering the little people who are the backbone of the nation’s economy. If successful, this initiative will be an important milestone in the history of MSME development in Indonesia, while paving the way for more inclusive and equitable economic growth.
)* The author is a contributor to Ruang Baca Nusantara, UMKM observer