Micro Business

Continuing to Increase, Interest in Micro Businesses Still Dominates in the Time of a Pandemic

Did you know that MSMEs contribute as much as 60% to the national economy? At a time when many companies went out of business or decided to stop production during the COVID-19 pandemic, the microbusiness ecosystem continues to grow rapidly. It can be said that the interest in micro-enterprises still dominates during the pandemic.

The Investment Coordinating Board (BKPM) announced that the number of Business Identification Numbers (NIB) entered during 2020 had reached 1 million applications, of which most of them came from the micro sector. Here is the full review.

The record for the most NIB submissions throughout 2020

Even though the Indonesian economy is experiencing ups and downs amid this pandemic the data collected at BKPM shows a significant increase in the application of NIB in the micro sector. Clearly, BKPM also stated that this increase was continuous, it had occurred since August 2020.

BKPM announced that there was a record for the highest NIB submission through OSS 2020 in October 2020, reaching 377,540 applications that had been received by BKPM. Of course, this is proof that the interest in micro-enterprises continues to dominate during the pandemic, considering that 93.6% of the total NIB applications came from the micro-enterprise sector, or more precisely, as many as 353,478 applications. The record recorded in October 2020 experienced an increase of 91.3% more than the number of NIB applications in the previous month, where there were 197,322 applications through OSS.

The interest in micro businesses continues to dominate during the pandemic and grows positively in line with the government’s efforts to issue various policies in the context of recovering the national economy from the impact of the COVID-19 pandemic.

Solid support from BKPM and the Job Creation Act

As of August 2020, the number of NIB applications in the micro-enterprise sector has always increased sharply and is in the range of 100,000 applications. This is the result of the efforts made by BKPM in facilitating the business licensing process as well as the entry of domestic and foreign investment into the MSME sector.

One of them is the OSS platform which makes it easier for entrepreneurs to manage various requirements and permits for MSMEs. So, you no longer need to wait in line. What’s more, the interest in micro-enterprises continues to dominate during the pandemic, which is the driving force for the ratification of the Job Creation Law, which includes 186 articles and 11 clusters, one of which regulates government support for efforts to grow an investment ecosystem and business activities.

One of the policies contained in the Job Creation Law is the convenience of business actors in managing permits, where they are only required to have a NIB which will be processed within 3 hours through OSS. In addition, the Job Creation Law also prohibits foreign investors from becoming shareholders in MSMEs, as well as obliges large investors to partner with MSMEs.

The role of MSMEs in the Indonesian economy

The decline in the number of NIB applications during the second quarter of 2020 had indeed made BKPM worried about the micro sector business ecosystem. However, because the enthusiasm of micro business actors continued to dominate, precisely throughout the third quarter of 2020, BKPM actively intervened to support the micro business sector.

This is because the role of MSMEs is so large in the movement of the national economy. It can be seen from the example of the case during the 1998 crisis where MSMEs became the biggest support for Indonesia’s economic recovery at that time. The same thing happened during the economic crisis due to the pandemic in 2020. Instead of waiting for the post-pandemic momentum, micro-business actors continued to actively operate and innovate to get the greatest possible profit.

 

What’s more, MSMEs play a role in opening employment opportunities in Indonesia, to be precise around 96.87% of the total national workforce. To continue to support the interest of micro businesses to continue to dominate during the pandemic, the government has also helped by providing stimulus, such as the Assistance for Micro Business Actors (BPUM) program.

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