Jakarta | The government and the House of Representatives (DPR) continue to boost the still low credit distribution for micro, small, and medium enterprises (MSMEs). It is believed that improving MSMEs' access to capital can significantly increase employment rates. Therefore, the Guarantee Bill needs to be passed immediately.
This issue was discussed in a discussion themed "Guarantee Bill" at the Pressroom of the Nusantara III Building, DPR RI Jakarta, on Tuesday (13/10/2015). Economic analyst from Indef, Didik J. Rachbini, fully supports the ratification of the Guarantee Bill.
He provided examples of developed countries that highly prioritize the development of the MSME sector as an economic driver. In these countries, people with low levels of education are largely absorbed into this sector.
"Japan, for example. For formal jobs requiring low education skills, they actually hire workers from other countries. Domestic workers at that level prefer to work in the MSME sector because it is more developed and promising," said Didik J. Rachbini.
However, Didik emphasized that the Guarantee Bill should not weaken the strength of MSMEs themselves. Providing various stimulus facilities for MSMEs could potentially weaken their resilience in facing challenges.
"For instance, reducing KUR interest rates from 22% to 12% might make them complacent and less motivated," he said.
President Director of Perum Jaminan Kredit Indonesia (Perum Jamkrindo), Diding S. Anwar, stated that he fully leaves the decision on the Guarantee Bill to the government and DPR. He also agrees that the bill can create jobs by improving the MSME sector.
He mentioned that the potential for guarantees in the MSME sector remains vast. Moreover, data from December 2014 showed that the ratio of MSME and cooperative credit distribution to the total credit issued by financial institutions was only 18.7%.
This is equivalent to Rp707 trillion out of the total national outstanding credit of Rp3,779 trillion distributed to the MSME sector.
"This highlights the importance of the Guarantee Bill so that banks and other financial institutions can channel credit to feasible but not yet bankable MSMEs," he said.
Diding also noted that there are around 58 million MSMEs in Indonesia, employing 97.3% of the national workforce and contributing 59.08% of the national GDP. This means that MSMEs are a sector that requires primary attention.
Meanwhile, the Financial Services Authority (OJK) recorded that credit distribution to the MSME sector reached Rp754.6 trillion as of July 2015. This value increased by 3.7% compared to December 2014. However, credit growth in this sector has slowed and is lower than industrial sector credit growth, which reached 4.34%. (Team)
Photo Caption:
Encouraging Employment Growth. INDEF economist, Prof. Didik Rachbini (center), along with Perum Jamkrindo President Director, Diding S. Anwar (right), were speakers in the Legislative Forum discussion on the Guarantee Bill at DPR Jakarta on Tuesday (13/10). It is expected that the Guarantee Bill will help micro, small, and medium enterprises (MSMEs) and cooperatives gain easier access to credit, thereby increasing employment absorption. (Public Relations)