40 Million MSMEs Still Lack Business Identification as Government Streamlines Registration Process

Deputy Head of BKPM, Todotua Pasaribu. (Photo: RMOL/Alifia)

As many as 40 million micro, small, and medium enterprises (MSMEs) have not yet obtained a Business Identification Number (NIB) as official legal recognition.

Deputy Minister of Investment and Downstreaming/Deputy Head of BKPM, Todotua Pasaribu, stated that this figure represents a major challenge that needs to be addressed promptly.

Data from the Ministry of Investment and Downstreaming/BKPM shows that, to date, 15.2 million NIBs have been issued. Of this total, approximately 14.9 million are micro-enterprises.

Meanwhile, the potential number of micro-enterprises in Indonesia is estimated to reach 56 million units. This means that there are still over 40 million MSMEs that have not been formally registered.

“There is still a significant number, around 40 million, that we need to address so that these businesses can quickly obtain legal recognition. This will also be beneficial for the country because the contribution of revenue from the MSME sector will naturally increase,” said Todotua at his office in Jakarta, Tuesday, 24 February 2026.

He explained that one of the main obstacles in issuing NIBs has been the requirement for a Certificate of Conformity for Land Use Activities (PKKPR) or a location permit. This process has been considered time-consuming because it requires several technical steps.

As a measure to accelerate the process, the government has issued a Circular Letter from the Minister of Investment and Downstreaming/Head of BKPM Number 1 of 2026, which regulates the simplification of the issuance of land-based PKKPRs for micro-enterprises.

Under the new scheme, micro-enterprises can submit a PKKPR through a self-declaration, which is automatically approved by the system, making the NIB issuance process faster.

“In the next three months, this circular letter will be upgraded into a regulation. The content will stipulate that for micro-enterprise activities, the PKKPR or location permit can be obtained through a self-declaration that is automatically approved. This will make the NIB issuance process faster,” he explained.

Although the procedures have been streamlined, the government has affirmed that the substance of land use regulations will still be enforced. Businesses are still required to include the coordinates and address of their business through the self-declaration mechanism.

This measure is expected to accelerate the formalization of MSMEs and expand the base of officially registered businesses, thereby strengthening the sector’s contribution to state revenue and economic growth.