Indonesia is a nation of Micro Business

[Indos]

Indonesia is second place in the world in term of its micro business density. According to Indonesian finance minister, Sri Mulyani in 2016, Indonesian micro, small, and medium size companies create 107.6 million job and contribute to 60.6 % to Indonesia GDP. These enterprises account for 99 percent of the total amount of enterprises that are operating in Indonesia.

Research from Vistaprint

https://www.forbes.com/sites/davidh...o-start-your-own-micro-business/#7d4facbd3c60

 

[Indos]

Indonesian Economy: Micro, Small & Medium Sized Enterprises
03 Agustus 2016 |

• WIEF
• Sri Mulyani Indrawati
• Small and Medium Enterprises
• SME

Indonesia's Finance Minister Sri Mulyani Indrawati emphasizes the importance of cooperation between the government and Indonesia's micro, small and medium enterprises (including start ups). Indrawati spoke at the 12th World Islamic Economic Forum (WIEF) that opened on Tuesday (02/08) in Jakarta. Last week, Indrawati was appointed Indonesia's new finance minister in a cabinet reshuffle, replacing Bambang Brodjonegoro. She had already been finance minister between 2005 and 2010 under former president Susilo Bambang Yudhoyono.

In her speech Indrawati stated that Indonesia's micro, small and medium sized enterprises are the backbone of the Indonesian economy. These enterprises account for 99 percent of the total amount of enterprises that are operating in Indonesia and they create a total of 107.6 million jobs in Southeast Asia's largest economy. Moreover, Indonesia's micro, small and medium-sized companies contribute 60.6 percent to Indonesia's gross domestic product (GDP). All these facts indicate the importance of the existence of these companies. In fact, they cushion the country's economy in times of shocks. However, the majority of these companies do not pay taxes, while most workers belong to the informal sector.

Sri Mulyani Indrawati also emphasized that after political decentralization (in the post-Suharto era) Indonesia is now in the middle of the process of economic decentralization in which strong economic growth has become felt in the regions rather than the center. Therefore, the micro, small and medium-sized companies in the rural areas have great potential. However, they need to engage in larger networks and it should be made easier for them to obtain credit by lowering the interest rates of Indonesia's micro credit program (in Indonesian: Kredit Usaha Rakyat, KUR), particularly for those that are export-oriented.

Indrawati added that most emerging markets are too focused on economic development in the cities, while more-or-less neglecting the rural areas. However, part of economic decentralization is that the rural areas become increasingly important for the overall economy. Here lies a great task for the micro, small and medium-sized enterprises. To support these companies, the Indonesian government has already simplified the permitting process for small and medium-sized companies in one of the economic stimulus packages as well as opening-up 19 sub-sectors for these companies and cooperatives. Moreover, in 62 sectors foreign investment is only allowed provided the foreign investor partners with local small and medium-sized enterprises.

https://www.indonesia-investments.c...micro-small-medium-sized-enterprises/item7068

 

[Indos]

Jokowi wants more microcredit disbursements to productive sectors

• Marchio Irfan Gorbiano
  The Jakarta Post
  

Jakarta / Tue, December 10, 2019 / 04:58 pm

President Joko “Jokowi” Widodo has said that he wants the government’s microcredit program (KUR) to be channeled to more productive sectors so that the loans would have more impact on the economy.

Speaking during a Cabinet meeting about KUR, Jokowi said he had received reports that more KUR loans were disbursed to the trading sector instead of to the productive sectors.

“This is what we need: to shift [the disbursement] into more productive sectors, particularly micro businesses in the agriculture sector,” said Jokowi at the Presidential Office on Monday.

The government has raised the value ceiling of total KUR loans to be disbursed in 2020 to Rp 190 trillion (US$13.55 billion) and has committed to a gradual increase of the ceiling to Rp 325 trillion by 2024. The microcredit interest rate was also brought down to 6 percent next year from the current 7 percent.

Jokowi said he received reports that banks appointed to disburse KUR loans to the small and medium enterprises (SMEs) still asked for collateral to avoid taking on non-performing loans (NPL), adding that such practices should be avoided going forward.

Read also: Government to reduce KUR annual interest rate to 6 percent in 2020

“These kinds of practices cannot happen, so that KUR loans are truly channeled to the productive sectors and can upgrade our SMEs,” said Jokowi.

He proposed several ideas to change the KUR disbursement mechanism, such as by offering specialized schemes according to the needs of certain industries, including adjusting a loan’s grace period to an SME's production cycle. Another way proposed was that the government could lengthen maturity periods for “investment KUR” so that SMEs could have more time to expand their businesses.

Between January and September this year, as much as Rp 115.9 trillion in KUR loans were disbursed to 4.1 million of borrowers, according the Office of the Coordinating Economic Minister. The figure represented 82.7 percent of the Rp 140 trillion KUR ceiling set for 2019.

About 50.4 percent of the KUR loans in the first nine months of this year were disbursed to the productive sector, below the government’s target of 60 percent.

https://www.thejakartapost.com/news...edit-disbursements-to-productive-sectors.html

 

[Indos]

2019 KUR realization reaches Rp139.5 trillion: ministry
2 hours ago

Deputy of Macro Economy and Finance at the coordinating ministry of economic affairs Iskandar Simorangkir in the socialization of KUR implementation guidelines in Jakarta, Tuesday. (21/01/2020). ANTARA/Dewa Wiguna/AK


Jakarta (ANTARA) - The realization of the microcredit program (KUR) for the January-December 2019 period reached Rp139.5 trillion or 99.6 percent of the target of Rp140 trillion, the Coordinating Ministry for Economic Affairs has stated. "Actually, if we don't brake (the realization) can be surpassed," said Deputy of Macro Economy and Finance at the Coordinating Ministry of Economic Affairs Iskandar Simorangkir on the socialization of KUR implementation guidelines in Jakarta, Tuesday.

If the realization of KUR distribution was in excess, the government would not pay subsidies to banks or distributor agencies, according to him.

Even so, there were several banks and distributor agencies that exceeded the realization, but the government tolerated it, Iskandar admitted.

"Because the budget is still sufficient, we still agree," he said.

The government reduced the KUR interest rate from 24 percent in 2008 to seven percent per year in 2018.

In 2020, the government will again reduce the KUR interest rate to six percent per year with an increased ceiling from Rp140 trillion to around Rp190 trillion.

Iskandar detailed the realization of KUR 2019 absorbed by 4.71 million debtors throughout Indonesia.

The KUR realization and target since 2016 has increased. In 2017 it realized Rp96.7 trillion from the target of Rp110 trillion, and in 2018 it reached Rp120.3 trillion from an Rp120 trillion target.

KUR for the trade or non-production sector in 2019 began to decline reaching 48.5 percent from 53 percent in 2018 due to the validity of the KUR realization target for the production or non-trade sector since 2017.

KUR realization of the production sector as of December 31, 2019 reached 51.5 percent, which is still below the target of 60 percent.

The Coordinating Ministry for Economic Affairs details the top ten KUR disbursements by province with the most Central Java reaching Rp82.8 trillion, followed by East Java Rp78.6 trillion.

West Java with the realization of the distribution of KUR Rp59.7 trillion, South Sumatra Rp27.3 trillion, North Sumatra Rp20.2 trillion, and Bali the realization of KUR reached Rp17.7 trillion.

Other provinces are DKI Jakarta with Rp15.8 trillion, Lampung with Rp13.9 trillion, Jambi with Rp13.5 trillion and West Sumatra with Rp11.5 trillion.

There are 44 KUR distributors consisting of 38 national banks and regional development banks, while the rest are finance companies and cooperatives.

Related news: Ministry encourages fishery businesspersons to avail KUR benefits
Related news: Tourism Ministry supports tourism-related SMEs in Labuan Bajo

Reporter: Dewa Ketut, Azis Kurmala
Editor: Rahmad Nasution

https://en.antaranews.com/news/140027/2019-kur-realization-reaches-rp1395-trillion-ministry

 

[Indos]

 

[Indos]

The long-term strategies that will help Indonesia build a modern economy

 

[Indos]

Micro lender holding hoped to boost financial inclusion​

The Badung Traditional Market in Denpasar, Bali, is seen in this 2017 photo.(JP/Anggara Mahendra)


Vincent Fabian Thomas (The Jakarta Post)
PREMIUM
Jakarta
● Tue, July 27, 2021


With the recent formation of a state-owned micro lender holding firm, Indonesia’s tiniest businesses may expect easier access to more affordable loans, paving the way for the leveling up of an economic sector that absorbs the majority of the country’s workforce.

The government issued earlier this month Government Regulation (PP) No. 73/2021 that hands over a majority stake in financing firm PT Permodalan Nasional Madani (PNM) and pawnshop chain PT Pegadaian to small business-focused lender Bank Rakyat Indonesia (BRI) to form the holding company, popularly called the “ultra-micro holding”.

The holding firm is not only expected to help micro but also ultra-micro enterprises. The former are defined as businesses with an annual gross revenue of under Rp 2 billion (US$138,020) according to the PP while the latter have revenues under Rp 300 millio...

Micro lender holding hoped to boost financial inclusion

The holding company plans to serve ultra-micro companies with annual revenues of under Rp 300 million (US$20,696) and who require loans under Rp 10 million.

www.thejakartapost.com

 

[Indos]

Executive Column: TaniFund CSO says agriculture lender now eyeing SMEs​

TaniHub chief strategy officer Natalia Rialucky “Ria” Marsudi(Courtesy of TaniHub Group/.)


Eisya A. Eloksari (The Jakarta Post)
PREMIUM
Jakarta ● Tue, August 31, 2021

Indonesia’s agricultural sector posted annual growth of 2.59 percent in the fourth quarter of 2020 while the overall economy contracted 2.19 percent as a result of the COVID-19 pandemic.

However, farmers are often hard-pressed to get funding from formal institutions, such as banks, as most lack business track records, credit scores and reliable off-takers. A lending platform for farmers has begun to tackle this problem. TaniFund has disbursed more than Rp 320 billion in loans to date and plans to double that number in the coming years.

Executive Column: TaniFund CSO says agriculture lender now eyeing SMEs

The chief strategy officer of agriculture lender TaniHub lets us in on the means and goals of the start-up, which uses technology to unlock opportunities for farmers and small business owners across the country.

www.thejakartapost.com

 

[Indos]

Tani Fund is a subsidiary company of Tani Hub. Tani in Indonesian language means Farming.

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TaniHub bags $70m Series B, aims to expand supply chain​

Agriculture Minister Syahrul Yasin Limpo (second right) makes an official visit on April 21, 2021 to TaniHub's National Fulfillment Center (NFC) in Cikarang, Bekasi, West Java, accompanied by TaniHub Group CEO Pamitra Wineka (right) and chief operating officer Sariyo (third left). (Courtesy of Tanihub/.)

Vincent Fabian (The Jakarta Post)
Jakarta ● Mon, May 24, 2021


TaniHub Group, one of Indonesia's top agriculture technology start-ups, has raised US$69.5 million (Rp 942 billion) in a Series B funding round to expand its supply chain outside the islands of Java and Bali.

The start-up said in a statement on Friday it would use the new funds to build more “mini hubs” of warehouses or packaging facilities across the archipelago with an aim to boost transactions and exports of fresh products by volume.

Supply chain services is one of three core businesses TaniHub provides farmers. The other two services are a fresh produce online marketplace and peer-to-peer lending.

“We are planning to strengthen our role in every region of Indonesia, bringing farmers and consumers closer together,” TaniHub Group CEO Pamitra Wineka said in the statement.

The new funding round was led by MDI Ventures, a subsidiary of state-owned telecommunications giant PT Telekomunikasi Indonesia (Telkom), and involved Add Ventures, BRI Ventures, Flourish Ventures, Intudo Ventures, Openspace Ventures, Tenaya Capital, UOB Venture Management and Vertex Ventures.

TaniHub said its business had grown a whopping 639 percent in 2020, when it also expanded its business beyond Java by opening a warehouse in Bali. The agritech start-up added it planned to expand to the islands of Kalimantan and Sumatra.

According to business data provider Crunchbase, the latest Series B round brings TaniHub’s total funding to $94.5 million, following an extended Series A funding round in April that raised $17 million.

MDI Ventures portfolio director Sandhy Widyasthana said the new fund, which had been “entrusted to MDI from Telkom and the State-Owned Enterprises (SOEs) Ministry”, was expected to help TaniHub expand its reach to more farming communities in the country.

The agriculture sector leads in workforce absorption at 30 percent, yet it is also very low-tech, and less than one-fifth of all farmers have tertiary and higher education.

Since its establishment in mid-2016, TaniHub has partnered with over 35,000 smallholder farmers and operates 12 distribution hubs to date, distributing over 900 different agricultural products to more than 200,000 customers.

TaniHub bags $70m Series B, aims to expand supply chain

After expanding to Bali last year, the agritech start-up is looking to expand its supply chain services to other Indonesian islands like Kalimantan and Sumatra.

www.thejakartapost.com

 

[Indos]

Indonesia Central Bank issues new banking rules on mandatory MSME lending
CONTRIBUTOR
Gayatri Suroyo Reuters

Bank Indonesia Head Quarter, Central Jakarta

JAKARTA, Sept 2 (Reuters) - Indonesia's central bank has issued new rules making it easier for banks to meet requirements on supporting small and medium business, in a measure also aimed at bolstering an economic recovery from the COVID-19 pandemic, it said in a statement.

The new rules replaced a 2015 regulation mandating banks to provide 20% of their total lending to micro, small and medium enterprises (MSMEs), which some banks had trouble meeting due to a lack of expertise in giving such loans.

Under the new regulation, which takes effect in June next year, banks must provide financing of at least 20% of their total portfolio for MSMEs, their supply chains or low income earners in what Bank Indonesia (BI) calls the macroprudential inclusive financing ratio (RPIM)

Channelling loans via other banks or non-bank financial firms as well as buying securities issued for inclusive financing will also count as meeting the RPIM.

The mandatory ratio will go up to 25% in June of 2023 and to 30% in June of 2024 and banks that fail to meet the ratio must pay fines.

"The BI regulation was issued as part of efforts by BI to increase economic inclusion and open up financial access, as well as to strengthen MSMEs' roles in the national economic recovery," BI said in the statement late on Wednesday.

The new rules will also provide more options for banks to meet minimum MSME credit requirements, it said.

Islamic banks must also comply with the new rules.

(Reporting by Gayatri Suroyo; Editing by Martin Petty)

https://www.nasdaq.com/articles/indonesia-c.bank-issues-new-banking-rules-on-mandatory-msme-lending-2021-09-02

 

[Indos]

Expect MSME Digital Market to be one-stop solution: SOEs Ministry

2 hours ago

Illustration- A Yogyakarta MSME player showcases products at an online marketplace

Jakarta (ANTARA) - Indonesia's State-Owned Enterprises Ministry expects the MSME Digital Market (PaDI) to serve as a one-stop solution for micro, small, and medium enterprise actors in Indonesia.

"This is a form of MSME Digital Market continuous improvement. In the future, MSME Digital Market is expected to be a one-stop solution for MSMEs," expert staff for finance and MSME development at the State-Owned Enterprises Ministry Loto Srinaita Ginting said at the opening of the PADI MSME Indonesia Virtual Expo Batch 2 in Jakarta on Monday.

The MSME Digital Market Virtual Expo 2021 Batch 2 is a virtual exhibition for showcasing a variety of products from seven MSMEs supporting partners, she informed. The event was attended by 98 state-owned enterprises and their subsidiaries, she said.

"We can also report that there are 295 MSMEs participating in the MSME Digital Market Virtual Expo 2021 Batch 2, an increase of 51 MSMEs compared to the previous event," Ginting said.

More than five thousand buyers from 58 state-owned enterprises have expressed their readiness to visit MSME outlets, she informed. At last 40 other state-owned enterprises are preparing to implement the MSME Digital Market, as stipulated by State-Owned Enterprises Minister Thohir.

Related news: Market digitalization involves digital platform, TV for market growth

Improvements have been made in the arrangement of the exhibition venue, which, this time, has been divided based on eight product categories so that it would be easier for visitors to see and compare existing products, she said.

The eight categories are infrastructure and building materials, writing and printing equipment, electronics, furniture and home decoration, agro and foods and beverages, creative products, rental and maintenance procurement, and services, Ginting informed.

At least 20 webinars would also be held at the event, which would be presented by state-owned enterprises, MSME supporting partners, as well as several other external parties such as the Directorate General of Taxes, Investment Ministry/Investment Coordinating Board, the Ministry of Cooperatives and SMEs, as well as sources from online law, she said.

"Thus, it is expected that the implementation of the MSME virtual expo will bring more comprehensive benefits. Not only can it offer opportunities to increase transaction acquisition, but also help (participants) gain understanding, education about service and financing policies, especially those related to MSMEs," she added.

Expect MSME Digital Market to be one-stop solution: SOEs Ministry - ANTARA News

Indonesia's State-Owned Enterprises Ministry expects the MSME Digital Market (PaDI) to serve as a one-stop solution for micro, small, and medium ...

en.antaranews.com

 

[Maula Jatt]

I wonder why are they not going to the next level?

like this is great potential tbh

 

[Indos]

I wonder why are they not going to the next level?

like this is great potential tbh

Some will go to the next level inshaAllah. Personally I know some one who previously only own material construction shop and now has a steel company.

This lady is still young, start from very small level, only her and her husband, and now has the biggest Batik store in Indonesia, if not the world. She has her own Batik brand that she sells in her own store. I believe she also has online store as well.

 

[Indos]

Fried fortunes: Indonesian street food hawkers more successful than you think

Thanks to 'oncom': Imanuddin, or Iman, can live comfortably after years of selling his specialty snack, 'oncom'. (Personal collection/Courtesy of Imanuddin)

JP STAFF
THE JAKARTA POST
PREMIUM
Jakarta / Mon, September 6, 2021 / 11:00 am



Operating and managing a street food stall might seem like a modest business, but these owners often have a network of similar stalls, gaining a small fortune every day. Imanuddin and Hajah Cicah Siti Hodijah are two such entrepreneurs. The two have one thing in common.

They are members of a certain food stall owner group on Facebook. Komunitas Gorengan (fritters community) exists to provide these hawkers a place to share and learn anything related to their business. This public group has 300,000 members from all across Indonesia.

Iman, 42, has been selling fritters, specifically the soybean-based oncom, since 2000. He owns several food stalls across Palembang. He moved out of his modest family home in Banyuasin, South Sumatra to make it as an entrepreneur in the city

Fried fortunes: Indonesian street food hawkers more successful than you think

A good number of Indonesian hawkers earn millions of rupiah daily but choose to keep a low profile.

www.thejakartapost.com

 

[Indos]

From pushcarts to online marketplace bestseller: the Sambal Raja Roa story​

Imam Masyuda, owner of Sambal Raja Roa


Josa Lukman (The Jakarta Post) Jakarta ● Tue, September 7, 2021

With 322 variations of sambal (chili sauce) across the archipelago, it is no surprise that Indonesians love the heat. From Bali’s sambal matah to Manado’s sambal roa, each region has its own specialty, mixing in unique ingredients that truly makes the sambal stand out, whatever the dish it is paired with.

As sambal is often a part of daily life in Indonesia, it is only natural that a large number of prospective entrepreneurs seek to popularize their own take on the condiment, one of them being Sambal Raja Roa. Established in 2014 by Imam Masyhuda in Balikpapan, East Kalimantan, Sambal Raja Roa is a MSME specializing in a variety of premium Indonesian sambal, from its namesake sambal roa and sambal ebi, sambal cumi, to sambal cakalang.

In an interview with tribunnews.com, Imam said that he started the business during his last semester of university after tasting sambal roa made by his Manadonese mother-in-law. “At the time, my mother-in-law was cooking sambal roa. That was the first time I tried it, and it was delicious. I offered the sambal to my friends and the feedback was great, so my wife and I decided to start selling the sambal roa,” he said. Starting from his mother-in-law’s recipe, Imam eventually branched out to other kinds of sambal.

He also started experimenting with sales channels, including using a cart to sell his products. Sambal Raja Roa finally went digital in 2019, when Imam left his job at a state-owned-enterprise to focus on his business full time.

From pushcarts to online marketplace bestseller: the Sambal Raja Roa story

With 322 variations of sambal (chili sauce) across the archipelago, it is no surprise that Indonesians love the heat. From Bali’s sambal matah to Manado’s sambal roa, each region has its own specialty, mixing in unique ingredients that truly makes the sambal stand out, whatever the dish it is...

www.thejakartapost.com