DPR Cites Legal Status and Data Integration as Key Challenges for UMKM Growth

Member of the House of Representatives’ Commission VII, Gandung Pardiman, highlighted two main challenges hindering micro, small, and medium enterprises (UMKM) from scaling up: business legal status and the lack of national data integration.

‘UMKM is the backbone of the national economy, contributing 61-63% to GDP and employing 97% of the workforce. However, digitalisation and scaling efforts will have no impact if these fundamental issues are not resolved: incomplete legal status and fragmented UMKM data,’ stated Gandung, citing a press release received on Friday, 29 May.

Gandung noted that many UMKM still lack a Business Identification Number (NIB) via OSS-RBA, halal certificates, Household Food Industry Permit (PIRT), and business tax identification numbers (NPWP). This prevents them from accessing People’s Business Credit (KUR), joining state-owned enterprise supply chains, or participating in government procurement via e-catalogues.

‘Banks and financing institutions require legal certainty. Marketplaces and state-owned enterprises need legal documents. If legal status is unresolved, UMKM will remain stuck at the micro level,’ Gandung explained.

He further elaborated that the second challenge is UMKM data scattered across sectors and marketplace platforms. This fragmentation causes government assistance programs to miss their targets and forces UMKM to repeatedly submit the same data.

‘This leaves the government struggling to deliver targeted stimulus to UMKM needing support or growth. Data integration is not just about efficiency, but fairness for UMKM entrepreneurs,’ he added.

Gandung affirmed his commitment to ensuring a healthy digital ecosystem that aligns with business protection and certainty for UMKM.

‘Digitalisation, legal status, and integrated data are key for UMKM to scale up,’ he concluded. (E-4)