Perbanas: 88 Percent of MSMEs Still Rely on Personal Funds

Jakarta (ANTARA) - The Perhimpunan Bank Nasional (Perbanas) stated that 88 percent of informal micro, small and medium enterprise (MSME) actors prefer using personal funds over bank credit. “Based on the survey, they (MSMEs) prefer their own funds,” said Aviliani, Head of Banking Economic Research and Study at Perbanas, in Jakarta on Thursday. Aviliani noted that the use of personal funds for financing by informal MSMEs also affects bank lending. She explained that Perbanas research over the past few years has shown a slowdown in MSME credit growth, which even experienced a contraction at one point. According to the Perbanas survey, 88 percent of MSME actors use personal funds, while 12 percent use external funds. Of that external portion, 49 percent comes from banks, 9 percent from friends or relatives, 32 percent from microfinance institutions, and 11 percent from other sources. “For external funds, it is 12 percent, while personal funds account for 88 percent,” she said. Aviliani added that bank and non-bank financing for formal MSMEs is also relatively small, with data showing 62 percent still using personal funds. “So it is not only banks, non-banks are also small. We hope that from the supply side it is ready, but the demand side needs to be built up,” she said. To address this, Perbanas has launched an MSME Centre as a collaborative platform to help MSMEs upgrade across various lines by strengthening business capacity, improving access to financing, expanding market access, and accelerating business digitalisation.