Jakarta – The government continues to push for the development of Micro, Small, and Medium Enterprises (MSMEs) as an effort to accelerate economic equality in Indonesia. The contribution of MSMEs to the national economy is very significant, as evidenced by data from the Coordinating Ministry for Economic Affairs (2025), which states that this sector contributes more than 60% to the Gross Domestic Product (GDP) and absorbs about 97% of the national workforce.
However, the majority of MSMEs still operate informally and do not have a Taxpayer Identification Number (NPWP) or Business Identification Number (NIB). Deputy Minister of Cooperatives, H. Ferry Juliantono, revealed that this situation poses a major challenge to the development of small and medium-sized businesses. “Many MSME actors are still reluctant to formalize their businesses due to a lack of understanding of regional taxes and the bureaucracy, which is perceived as complicated. In fact, with clear legality, they can access various funding and business development facilities,” he said.
To address this challenge, the government is prioritizing an empowerment-based approach to encourage MSMEs to voluntarily enter the taxation system and benefit from the applicable regulations. One concrete effort in this regard is the formation of the Ultra Micro Holding (UMi), led by PT Bank Rakyat Indonesia (Persero) Tbk (BRI), in collaboration with PT Permodalan Nasional Madani (PNM) and PT Pegadaian. BRI’s President Director, Sunarso, emphasized that the presence of the UMi Holding has had a positive impact on improving people’s living standards. “This synergy allows MSMEs to gain broader and easier access to capital, enabling them to grow and contribute more to the national economy,” he explained.
The Coordinating Minister for Community Empowerment, Muhaimin Iskandar, also highlighted the importance of cross-sector collaboration in MSME development. “The success of community economic empowerment cannot be achieved in isolation. The synergy between the central government, local governments, state-owned enterprises (SOEs), and the private sector is the key to enabling MSMEs to level up and grow in a sustainable ecosystem,” he said.
As a concrete step, local governments have begun rolling out additional incentives for MSMEs that have formalized their businesses. These incentives include financial management training programs, marketing strategies, business digitalization, and access to funding and investment. With ongoing training programs and cooperation with the private sector, MSMEs are expected to become more competitive and have high competitiveness in both local and global markets.
Through these various initiatives, the government is optimistic that strengthening the MSME sector can become the main driver of economic equality and poverty alleviation in Indonesia. “With a supportive ecosystem and policies that favor MSMEs, we can create more inclusive and sustainable economic growth,” concluded Muhaimin.
