77 Percent of MSMEs Operate Without Legal Status, Government Provides Assistance
As many as 77 percent of micro, small, and medium enterprises (MSMEs) in Indonesia still conduct their business activities without official legal status. This situation has prompted the government to strengthen various assistance programmes to accelerate the transformation of micro enterprises from the informal sector into businesses that are more structured, protected, and competitive. The effort is being carried out through strengthening business legality, quality certification, business and product protection, as well as expanding access to financing, all integrated within the Festival of Ease and Protection for Micro Enterprises.
Minister of MSMEs Maman Abdurrahman affirmed that the government continues to provide various forms of assistance so that MSME players can develop sustainably. The assistance includes ease of licensing, certification, access to financing, and business capacity building, packaged in a single integrated service.
“We strive to provide the best possible service in the context of granting permits, business assistance, certification, and access to financing, both KUR and non-KUR. We package all these services in the Festival of Ease and Protection for Micro Enterprises,” Maman said after opening the festival in Balikpapan on Wednesday (17/6).
According to Maman, strengthening assistance is crucial because the majority of MSMEs still operate informally. The low level of business legality means many MSME players have not yet obtained legal certainty, business protection, or optimal access to various empowerment and financing programmes.
To address this issue, the Ministry of MSMEs is strengthening collaboration with various stakeholders, ranging from ministries and agencies, regional governments, the banking sector, to the business community. This synergy is directed at accelerating the transformation and formalisation process of micro enterprises so that more MSME players possess official legal status, receive business protection, and can access various development programmes provided by the government.
“Because we realise that when MSMEs grow and gain massive and optimal access to licensing and financing, the wheels of the regional economy will also turn,” Maman stated.
In agreement, East Kalimantan Governor Rudy Mas’ud assessed that the challenges facing MSMEs in the future are increasingly complex, thus requiring stronger support from all stakeholders. “Therefore, we must continue to encourage MSMEs to upgrade. From businesses that do not yet have legality to legal businesses, from traditional businesses to those utilising digital technology, and from businesses that merely survive to those capable of growing and being competitive,” Rudy said.
He also invited regional governments in East Kalimantan to continue presenting policies that favour MSMEs as the driving motor of the regional economy. “How can our MSMEs quickly upgrade so that the regional economy becomes stronger, unemployment decreases, and the welfare of the community, God willing, increases,” he remarked.
The 2026 Festival of Ease and Protection for Micro Enterprises will be held in 10 locations across various regions of Indonesia, involving approximately 1,000 micro business players. Balikpapan is the first city to open the series of activities as part of efforts to strengthen a resilient, inclusive, and sustainable micro business ecosystem.