The Financial Services Authority (OJK) has said it is making efforts to encourage the digitization of micro, small, and medium enterprises (MSMEs) to support the national economic recovery program.
OJK’s support for digitizing MSMEs has been incorporated in one of the pillars of its short-term policy direction, deputy commissioner for banking III at OJK, Slamet Edy Purnomo, said.
“OJK has made and updated several regulations to encourage digitalization and to regulate digital products,” Slamet said during an online discussion on ‘Economic Recovery for the National MSME Sector’ in Jakarta on Wednesday.
OJK’s support for the MSME sector has also been included in the OJK 2021-2025 structural framework, which aims to boost the resilience and competitiveness of the financial services sector, he added.
OJK is also encouraging banks to build new features related to digital products and collaborate with various parties to conduct open banking, he revealed. This includes granting licenses to startups and digital acceleration of a number of banks, he added. “The acceleration of digital transformation is very important for us to build the arrangements so that they are more conducive to accelerating the digital ecosystem, improving our human resource capacity, conducting research, and also developing technology-based supervision,” he elaborated.
Slamet also revealed that domestic and foreign investors are currently very enthusiastic about digitization, with even digital stamp mockups exceeding the market cap of large banks with a value exceeding Rp100 trillion.
“MSME digitization is very prospective and really (could provide an) answer (to) our future economic challenges,” he said. Furthermore, OJK has said it hopes the synergy between the government, banks, and other parties can continue to be integrated so that MSMEs can be successful in an era of economic disruption and digitalization.
The agency has asked the government to initiate and continue to develop a forum for improving the skills of MSMEs, initiating innovative solutions to widen access to MSME financing, such as securitization and MSME credit guarantees, as well as encouraging the establishment of independent credit bureau institutions and MSME business protection agencies.
OJK has also urged the banking sector to expand the assistance program for MSME debtors, encourage credit distribution, and increase cooperation with third parties such as e-commerce and / or fintech to expand the reach of the MSME market.
As per data from the Ministry of Cooperatives and SMEs, as many as 87 percent of MSMEs have not entered the digital market and the success rate of MSME assistance is just 4-10 percent.
Source: Antara News