JAKARTA | The existence of the guarantee industry is a crucial foundation for Micro, Small, and Medium Enterprises (MSMEs) as well as Cooperatives in improving the nation's economy in the future. Therefore, the guarantee industry must be present among business communities so that banks can offer more varied financial support.
According to the Chairman of the Central Indonesian Young Caucus (KMI), Edi Humaidi, the credit guarantee industry in Indonesia must participate in empowering MSMEs in the country so that business players can enhance their competitiveness.
“That is why we deliberately brought up the theme of the important role of the guarantee industry and collaborated with Perum Jamkrindo,” said KMI Chairman Edi Humaidi during the Public Dialogue themed "The Role of the Guarantee Industry in Empowering MSMEs and Cooperatives," organized by KMI together with Jamkrindo in Pamekasan, Madura, on Saturday (28/5).
Meanwhile, Perum Jamkrindo’s Director of Operations and Network, Sophia Alizsa, acknowledged that credit distribution for MSMEs in Indonesia has not been optimal and needs to be continuously improved.
She explained that the MSME credit distribution ratio so far has only reached 18.7% of total credit. Meanwhile, micro businesses in Indonesia amount to 57.89 million units, accounting for about 99% of the total businesses in the country, absorbing 88.90% of the workforce. The Gross Regional Domestic Product (GRDP) contribution of this sector reaches 60.34%, or around Rp5,544 trillion.
"Although MSMEs dominate the business sector, many MSME players still struggle to access financial sources, which has become one of the barriers to their growth. The cause is the limitation in legal formal aspects and the difficulty in meeting banking technical requirements," she said.
Therefore, Alizsa mentioned that Jamkrindo acts as a guarantor so that MSME players, who are the backbone of the economy, can access financial institutions as stipulated in Law No. 1 of 2016 concerning Credit Guarantees for Micro, Small, and Medium Enterprises.
"This Guarantee Law provides certainty to financial institutions in case of risks. It also regulates the licensing of guarantee institutions, guarantee mechanisms, and dispute resolution through alternative institutions," she explained.
Although the initial credit distribution for micro businesses was low, and many business actors had no opportunity to obtain business capital loans from banks, with the enactment of the law and the government’s People's Business Credit (KUR) program, the guarantee value provided by Perum Jamkrindo has significantly increased.
"For example, in East Java, by the first quarter of 2016 alone, the KUR guarantee value had reached Rp1.2 trillion, with bank credit guarantees reaching Rp7 trillion," Alizsa explained.
The public dialogue held by KMI and Jamkrindo featured not only Sophia Alizsa but also Dr. Rudi Purwanto, Deputy Dean I of the Faculty of Economics and Business at Airlangga University Surabaya, and Uswatun Hasanah, manager of the Business Incubator at Trunojoyo Madura University (UTM) Bangkalan. The event was attended by hundreds of MSME and cooperative players, as well as young entrepreneurs from four districts in Madura Island: Bangkalan, Sampang, Pamekasan, and Sumenep. (Source: Berita Sore.com)