The SUAR Team explored the insights of company leaders, regulators, and economic observers in efforts to contribute to the development of MSMEs through the Universe of Business Survey. Conducted from July 22 to August 7, 2025, the survey produced several notable findings that deserve follow-up from stakeholders.

Highlights:

• 40% of respondents stated that MSME actors find it difficult or very difficult to access financing (credit) from banks.
• Factors hindering MSMEs from obtaining credit include lack/limited collateral, lack of information about credit, low financial literacy of MSME actors, complicated regulations/administration, unfeasible MSME businesses, and resistance from banks.
• Regulatory reform is absolutely necessary (80%).
• MSME actors need to partner with large companies to obtain bank credit (73.3%).
• Collateral diversification is required (86.7%).
• Three factors that determine MSME growth are: ease of credit (financing) access, promotional/marketing strategies and market expansion, and good business management.

Micro, small, and medium enterprises (MSMEs) in Indonesia have long proven their significant role. With their sheer numbers and persistence, MSMEs have become a pillar of the economy and have proven resilient during times of crisis.

The vibrancy of MSMEs has supported many families and contributed to national economic growth.

According to the Ministry of Cooperatives and MSMEs, based on Central Bureau of Statistics data, there are currently 65.5 million MSME units that absorb 119 million workers. This figure accounts for more than half of Indonesia’s total workforce of 153 million people. The MSME sector contributes 61.9% to the country’s gross domestic product (GDP).

However, MSMEs still face major challenges: limited access to financing, low productivity, uneven digitalization, and weak market networks and partnerships.

Regarding access to financing, a survey conducted by the SUAR Team among company leaders, regulators, and economic observers revealed differing views. While 60% of respondents believe MSME actors generally have fairly easy access to financing, 40% say they still face difficulties, even severe difficulties, in obtaining financing.

Bank Indonesia data shows that as of June 2025, MSME loans disbursed amounted to IDR 1,506.85 trillion. This marks a 76% increase compared to ten years ago, with MSME credit growing by an average of 7.4% annually.

By business scale, micro-enterprise loans received the largest portion at 43.43%, followed by small enterprises (34.36%) and medium enterprises (22.21%).

From 2017–2024, micro-enterprise loans grew faster than the other two segments, averaging 18.3% annually. The highest growth occurred after the Covid-19 pandemic in 2021, reaching 57.74%.

Small-enterprise loans grew an average of 8.98% annually during the same period, while medium-enterprise loans shrank, averaging –1.49%. The pandemic caused three consecutive years of contraction in medium-enterprise loans: -23.86% in 2021, -5.88% in 2022, and -4.30% in 2023.

Although the nominal amount of MSME credit continues to rise, respondents emphasized that many MSMEs still struggle to obtain loans.

The majority of respondents cited lack or limited collateral as the main factor hindering MSMEs from securing bank loans (26.7%). Other factors include lack of information about credit (16.7%) and low financial and digital literacy (16.7%).

Difficult rules and administrative processes were also highlighted (13.3%)—from complicated requirements to lengthy loan disbursement processes.

Other reasons included unfeasible businesses with limited resources, legal issues that reduce bank trust (13.3%), and banks being overly selective or charging high interest rates (10%).

To overcome these financing challenges, respondents agreed that regulatory reform is essential. Additionally, MSMEs need to partner with large companies to ease bank loan access. Another solution is collateral diversification, which can broaden opportunities for MSMEs to secure financing.

Regulatory Reform

The majority of respondents believe that regulatory reform is necessary to make it easier for MSME players to obtain bank credit (80%). The main reason cited is the need to simplify regulations so that MSMEs can more easily manage credit administration (41.7%).

This refers back to one of the key factors previously mentioned as a barrier to credit access. The simplification in question relates to the number of requirements, the length of procedures, processing time, and other administrative aspects.

Another reason is the need for breakthrough policies that are better suited to the real conditions of MSMEs (33.3%), which ultimately aims to provide greater ease for business players.

Respondents also argued that MSMEs have significant potential for the national economy, thus requiring a strong policy bias in their favor (16.7%). Furthermore, some noted that reforms would help MSMEs become more professional entities (8.3%), with the potential to drive economic growth, expand employment, encourage entrepreneurship, and strengthen the creative economy.

Even so, regulatory reform must still adhere to the principles of good business governance.

A small portion of respondents (13.3%) disagreed, stating that current regulations are already sufficient; what is needed instead is better socialization and communication so that MSMEs gain a clearer understanding when planning expansion or seeking additional capital.

In addition, respondents stressed that MSME development should also focus on guidance and empowerment so that businesses can be managed more effectively and sustainably

Capital is not always the primary factor for growth. Mapping markets and mitigating risks at the early stage of business are also necessary to ensure resilience and long-term sustainability.

MSMEs Partnering with Large Private Companies

The second solution proposed to ease MSMEs’ access to bank credit is forging partnerships with large private companies. This view was expressed by 73.3% of respondents. The main reason is that large corporations can serve as mentors or “foster parents” for MSMEs (31.8%).

This concept of a “foster parent” scheme has already been in practice, where big companies not only provide guidance but also act as off-takers by purchasing MSMEs’ products. Such relationships are typically built on principles of mutual need, trust, reinforcement, and shared benefit.

Through partnerships with established corporations, MSMEs have greater opportunities to obtain financing access (22.7%). Large companies can act as guarantors of collateral, while also providing market insights and access to expand MSMEs’ product development and sales (18.2%).

By being part of the supply chain of larger industries, MSMEs gain greater business certainty, which in turn helps them build credibility, professionalism, and long-term sustainability (13.6%).

MSMEs can become part of the supply chain of large corporations. This relationship is believed to provide greater business certainty.

There are numerous success stories of big corporations successfully mentoring MSMEs, although in some cases these partnerships are limited to fulfilling corporate social responsibility (CSR) obligations.

However, not all private companies are willing to take on such roles. Some remain selective and expect government incentives to participate in MSME partnerships (9.1%).

On the other hand, some respondents argued that MSMEs should not depend on partnerships with large private companies. Their reasons include the belief that MSMEs must remain independent (42.9%), concerns that foster-parent relationships may be difficult to sustain (28.6%), and fears of potential problems such as the exploitation of MSMEs (28.6%).

Diversifying Collateral Options

Another solution to ease MSMEs’ access to bank credit is providing more diverse collateral options—or in other words, collateral diversification. The majority of respondents (86.7%) expressed this view.

Collateral is a crucial element when applying for bank loans. Diversification is needed to give MSMEs greater flexibility, especially in terms of the types and schemes of financing (44%).

Collateral does not necessarily have to be in the form of physical assets (28%), as many MSMEs have limited collateral. Instead, collateral requirements should be adjusted to the conditions and capacity of MSME owners (16%), so that their businesses can grow more effectively.

Property assets, vehicles, and machinery or production equipment are the three most common types of collateral currently accepted by banks. However, to increase flexibility, other alternatives could also be recognized, such as the MSMEs’ own products or projects, invoices or receivables from sales orders, and even educational certificates, which some respondents suggested could be considered as valid guarantees.

Three Factors Driving MSME Growth

The effort to develop micro, small, and medium enterprises (MSMEs) has been an ongoing initiative for decades. Given their vast potential, building and strengthening MSMEs means building Indonesia’s economy.

The Semesta Dunia Usaha survey identified three key factors that drive MSME growth:

• First, promotion strategies, marketing, and market expansion (26.7%).
• Second, easier access to financing or credit for business expansion (23.3%).
• Third, effective business management by MSME owners (16.7%).

Beyond these three main factors, internal qualities of the entrepreneurs themselves are also crucial. Their mindset and mentality—from production planning, manufacturing, market mapping, product distribution, to risk mitigation—determine whether a business can endure over the long term and achieve expansion.

Creativity and product innovation are equally vital, influencing how well a brand is accepted—or even sought after—by the market. In today’s digital era, MSME players must also embrace technology to remain competitive and expand their businesses. Digital literacy has become a necessity.

Tax incentives are also essential, especially for newly established MSMEs, to ensure survival and sustainable growth. According to the Ministry of Cooperatives and MSMEs, six strategies are being implemented to foster MSME development.

These include market access expansion, product and service competitiveness enhancement, capacity and business management development, as well as acceleration of financing and investment.

Additional strategies involve easing business opportunities and strengthening cross-sector coordination.

Methodology and Survey Profile

The Semesta Dunia Usaha survey was conducted from July 22 to August 7, 2025. Respondents came from various backgrounds, including business leaders, regulators, and economic observers. From the business sector, participants ranged from directors and chief executives to business owners. On the regulator side, respondents included regional heads and members of parliament.

Respondents in this survey were selected using a purposive sampling method.