Indonesia disburses US$4.1 billion to support 14.9 million MSMEs

Yogyakarta (ANTARA) - The Indonesian government has disbursed Rp65 trillion (approximately US$4.1 billion) in micro-financing to 14.9 million previously unbanked micro, small and medium enterprises (MSMEs) through the Government Investment Center (PIP).

Speaking at the opening of the Micro Enterprises People's Market in Yogyakarta, Finance Minister Purbaya Yudhi Sadewa praised the PIP’s performance, noting that the funding - distributed between 2017 and June 2026 - serves as a vital lifeline for the country's massive informal economy.

Purbaya emphasized that access to capital is crucial for strengthening the grassroots economy, noting that Indonesia currently has approximately 66.5 million MSMEs.

"More than 67 percent of MSMEs are micro-enterprises, contributing more than 60 percent of GDP and employing nearly 117 million people," the minister detailed, highlighting the sector's immense footprint.

Despite their massive contribution, Purbaya acknowledged that micro and ultra-micro businesses remain the most vulnerable to market volatility.

"When raw material prices rise, demand drops, distribution is disrupted, or there are sudden needs, they do not have a strong cushion," Purbaya remarked.

To ease the financial burden on small-scale traders, the government has aggressively slashed micro-loan interest rates through the PIP from 22.5 percent down to 8 percent, he added.

The funding announcement comes amid strong macroeconomic indicators. Indonesia’s national economy grew by 5.61 percent in the first quarter of 2026—marking its strongest performance since 2014.

The province of Yogyakarta outperformed the national average, posting a robust 5.8 percent growth rate in the same period.

However, Purbaya emphasized that that macroeconomic data must translate to real-world benefits for ordinary citizens.

"Those numbers are important, but people do not think about economic statistics. They just ask whether their stalls are busy, whether there's a market for their crops, or whether their income is sufficient,” he said.

“That is why the 2026 State Budget is directed at MSME empowerment," Purbaya concluded.

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Translator: Hery Sidik, Yashinta Difa

Editor: Primayanti

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