By Supari
Micro, small, and medium-sized enterprises (MSMEs) are the backbone of Indonesia’s economy, representing more than 60% of its gross domestic product (GDP) and nearly 97% of its workforce.
But the value credit banks lend to this segment does not represent its importance. Only 7% of Indonesia’s credit goes to MSMEs, due to the low financial literacy and poor business management and accounting in this segment that hinders banks from conducting credit feasibility analysis.
To provide subsidized financing access for MSMEs and support financial inclusion, business empowerment, and national economic growth, Indonesia in 2007 launched the…