Jakarta, CNBC Indonesia – President Director of LPP-KUKM (SMESCO Indonesia) Leonard Theosabrata said there are many challenges in bringing the MSME sector, especially the micro and ultra-micro segments, to go global. Joint synergy between the private sector, government and institutions is also needed to encourage the capacity of MSMEs so that they are highly competitive and able to compete on the global stage.

Leo said that Indonesia has around 65 million micro, small and medium enterprises (MSMEs), which are dominated by the micro and ultra-micro segments. The micro and ultra micro segments dominate with a percentage of 95.5%.

Meanwhile, the micro and ultra-micro segments still have fundamental needs to be able to develop and upgrade their business class, namely resilience. The need for resilience includes good supply, price stability, stable market demand, as well as cheap and easy/affordable financing.

With different needs, he explained, the handling of the micro and ultramicro business segments is different compared to the business classes above, namely small and medium businesses.

“It has to be done together. That, all agencies have to do it and it has been done because the responsibility for MSMEs to advance to this class is spread across 22 ministries and agencies/institutions. Likewise between the private sector and the government. It has indeed been done, but it needs to be on a scale bigger,” he said, quoted from a written statement, Thursday (21/12/2023).

Meanwhile, he continued, business actors at the small and medium levels are relatively more resilient, so their needs and handling are different. Where the handling of the micro and ultra-micro business segments is more low touch to meet their basic needs, namely endurance, while the handling of the small and medium segments is more high touch with needs, such as incubation.

Leo also showed that the MSME players who took part in the BRILIANPRENEUR event were MSMEs who were curated and had achievements so they were relatively better prepared to compete in the global market. However, there are still many other MSMEs who are still struggling to move up in class, and there are even many business actors who are working for tomorrow.

“In the micro and ultra micro segments, the important mindset is that there are off takers, there are those who buy. Are branding and marketing something fundamental? The answer is between yes and no. We have to enable them with the right tools, and one of the most important components “The important thing and we have often discussed it everywhere is financing,” he said.

According to Leo, cheap financing is not enough for MSME players, especially in the micro and ultra-micro segments. Because they also need easily accessible financing. This is in line with the business pattern of the micro and ultra micro segments, namely working for tomorrow.

“If it's just cheap money, but not easy, that's not possible. It's expensive, but easy to use. Because friends who are micro may only need (the loan) for one day. That's why many people end up using pinjol (online loans) ,” he said.

On the other hand, BRI as a bank empowering MSMEs continues to emphasize its commitment to bringing the national MSME and ultra-micro sectors to the next level and able to continue to develop sustainably. Therefore, easy and fast financing for MSMEs is one of BRI's main concerns.

BRI President Director Sunarso emphasized that BRI's commitment to the MSME and ultra micro segments is also confirmed through the presence of Ultra Micro Holding which is driven by BRI together with PT Pegadaian and PT Permodalan Nasional Madani (PNM).

Ultra Micro Holding not only provides funding services, but also builds a conducive ecosystem for the ultra micro business segment to develop so that it can be upgraded to become a micro business, then a small business and a medium business.

“Therefore, coaching, business assistance, improving skills, digital literacy, empowerment, and expanding market access are part of the program run by the holding. Serving and empowering MSMEs is not just about business, but what is even more important is providing social welfare, Sunarso continued.

Regarding BRILIANPRENEUR, this program is one of BRI's steps as a financial institution that helps advance Indonesian MSMEs. This year, for the fifth time, BRI is again holding the UMKM EXPO(RT) BRILIANPRENEUR exhibition with the theme “Crafting Global Connection” or assembling global connections.

The UMKM EXPO(RT) BRILIANPRENEUR event was held as a means of business matching between Indonesian MSMEs and foreign consumers, so that it is hoped that it will be able to develop MSME players and increase national exports. This year BRI invited 700 curated MSMEs to appear at the exhibition.

This event succeeded in recording a dealing commitment through business matching worth US$ 81.3 million or equivalent to IDR 1.26 trillion (assuming an exchange rate of IDR 15,500 per USD). This value was achieved after carrying out 243 business matches from the initial target of US$ 80 million.

The business matching was carried out by 86 buyers from 30 countries with an initial target of 80 buyers from 25 countries. The buyers' countries of origin include Australia, Canada, Taiwan, Singapore, Malaysia and the United Arab Emirates.

The value of dealing commitment through business matching has increased from previous years. In 2019 the value of business matching reached US$33.5 million, increased in 2020 to US$57.5 million, and in 2021 it increased again to US$72.1 million, while in 2022 the value reached US$76.7 million.

[Gambas:Video CNBC]

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