Banking industry to not overlook small businesses, says Jokowi

Banking industry to not overlook small businesses, says Jokowi

Jakarta, The Gulf Observer: President Joko Widodo (Jokowi) urged the banking industry to not neglect the funding for micro, small, and medium enterprises (MSMEs) amid high lending and net interest margins (NIM) of banks.

“Do not ignore the funding for our MSMEs,” he stated at the 2023 Financial Services Industry Meeting, in Jakarta, Monday.

The president pressed for MSMEs to be given the maximum possible funding support while still prioritizing the precautionary principle.

He emphasized that the growth of MSMEs is important since they are one of the strengths of the Indonesian economy.

“(It is) because MSMEs are able to provide job opportunities for the people,” he remarked.

According to Jokowi, the banking industry in Indonesia continues to grow. In 2022, the banking performance was quite good, with credit growth of 11.3 percent and a capital ratio of 25.68 percent. This capital ratio figure is better than 23.31 percent recorded before the COVID-19 pandemic.

The head of state also pointed out that the NIM of banks in Indonesia, currently at 4.4 percent, is probably the highest in the world.

“This might be the highest NIM in the world,” he remarked.

Moreover, Jokowi sought concrete support from the financial services industry for the downstream natural resources program. The support includes funding for the construction of raw material processing and refining (smelter) installations.

“Earlier, the chairman of the Financial Services Authority (OJK), Mahendra Siregar, conveyed support for the downstream industry. I ask for concrete efforts since those, who want to build a smelter, have difficulty in accessing funding,” Jokowi emphasized.

He stated that downstream is the key for Indonesia to become a developed country with high income.

“This is what we must consistently encourage, so that our gross domestic product (GDP) continues to increase. I hope we can move forward by using downstream as one of the keys to becoming a developed country,” he added.