BI: Ecosystem Approach Needed for MSME Development

Bank Indonesia (BI) believes an ecosystem-based approach is necessary for the development and financing of MSMEs, with the hope that large corporations will eventually involve MSMEs as part of their supply chains. “So do not just look at one unit, but we can see the ecosystem of the MSME,” said BI Senior Deputy Governor Destry Damayanti at the Economic Briefing 2026 event in Jakarta on Friday. Destry cited the significant potential of MSMEs driven by women’s groups across the regions, noting that around 64 percent of MSME players are women. According to her, an ecosystem approach combined with improving the quality of MSMEs is expected to drive quality and inclusive economic growth. Meanwhile, Head of BI’s Macroprudential Policy Department Solikin M. Juhro explained that the experience of various countries shows that large industries in developed nations grow because they are supported by MSMEs and medium-sized industries that form part of their supply chains. He cited Japan, Germany, and China as examples of countries that built their large industries by strengthening the MSME ecosystem. In Japan and Germany, MSMEs and medium-sized industries are a crucial part of the manufacturing sector’s supply chain, while China complements this with a strengthened digital ecosystem and vocational education. According to Solikin, MSMEs can be divided into three levels. First, MSMEs that already have good performance but lack wider market access. This group needs support not only through financing incentives but also by bridging market access. Second, developing MSMEs that need improvements in business management, financial reporting, and other aspects. Third, MSMEs that are still weak in various aspects and require intensive mentoring. “That is our challenge. When we talk about the essence, the answer is the ecosystem. Experience in various countries shows that what is built is the ecosystem. We cannot develop MSMEs individually. What is needed is an end-to-end ecosystem,” explained Solikin. Solikin added that BI itself has a number of policies to support MSMEs, including through macroprudential policies such as the Macroprudential Liquidity Incentive Policy (KLM) and the Macroprudential Inclusive Financing Ratio (RPIM). “These two policies are in line with BI’s efforts to be pro-growth, but also quality,” said Solikin. In addition to policy, BI also has around 3,000 fostered MSMEs, with about 20 percent of them now being export-oriented. Furthermore, BI runs the Indonesia Acceleration Intermediation Programme (PINISI) initiative, which opens opportunities for business players from both the demand and supply sides through policy dialogue, business matching, and other regular activities.