Kadin Encourages Partnerships to Create Demand for MSMEs

The Indonesian Chamber of Commerce and Industry (Kadin) is encouraging a closed-loop ecosystem or supply chain partnership model between Micro, Small, and Medium Enterprises (MSMEs) and large companies to provide demand certainty. “Why don’t we try the demand side like in the old days, building a closed loop,” said Aviliani, Deputy Chair for Macro-Micro Economic Policy Analysis at Kadin, in Central Jakarta on Tuesday, 14 July 2026. Aviliani noted that this partnership model has already been implemented by companies, one of which is PT Astra International Tbk through the establishment of the Dharma Bhakti Astra Foundation to foster MSMEs. According to Aviliani, companies will be interested in the closed-loop scheme provided the government offers incentives. She explained that this supply chain partnership also requires mentoring, not merely functioning to create offtakers for goods. She proposed that the government reallocate a portion of the budget for subsidised people’s business credit (KUR) interest rates to become incentives for companies. Beyond providing business certainty for MSMEs, Aviliani stated that opening market access could impact banking credit performance. She is optimistic that banking credit in the MSME sector will grow. Aviliani said the slowdown in MSME credit growth is not caused by high interest rates, but rather by the demand-side uncertainty still faced by entrepreneurs. “We cannot blame the banks for not performing intermediation. What the government needs to work on is the real sector because it is sluggish,” she said. The Financial Services Authority (OJK) recorded that MSME credit increased by 0.60 per cent year-on-year in May 2026. However, by debtor category, the highest growth was experienced by corporate credit at 18.39 per cent year-on-year.