MSME Development

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MSME Development

As part of its macroprudential policy mandate, particularly in terms of stimulating the intermediation function and increasing access to finance, Bank Indonesia also contributes to MSME development, with a focus on access to finance for micro, small and medium enterprises (MSMEs).

MSMEs provide a significant contribution to Indonesia's national economy through gross domestic product formation and labour absorption.  Furthermore, MSMEs are also economically resilients, thereby supporting financial system and economic stability.  Nevertheless, MSME development faces various constraints, particularly in terms of access to finance.

The financing constraints experienced by MSMEs are caused in part by a lack of financial reporting as the main tool used by financial institutions to evaluate creditworthiness.  In response, Bank Indonesia strives to provide its best contribution through MSME development policies that increase access to finance.  Furthermore, MSME development efforts by Bank Indonesia aim increase the capacity and managerial capabilities of human resources in the MSME environment, while promoting innovation.

Bank Indonesia implements MSME development policy as an integral part of its strategic program as follows:
  1. Strengthening the effectiveness of monetary policy and the Bank Indonesia policy mix to achieve rupiah stability.
  2. Strengthening synergy between the Bank Indonesia policy mix, fiscal policy and structural reforms in order to manage the current account deficit and catalyse sustainable economic growth.
  3. Strengthening macroprudential policy and surveillance in order to maintain financial system stability.
  4. Strengthening Bank Indonesia policy and synergy with government and OJK policies in order to develop the digital economy and finance.
  5. Developing BI policy in synergy with other parties to support development of the Islamic economy and finance.
  6. Strengthening international cooperation in the interest of Bank Indonesia and the Republic of Indonesia.​

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