Pandemic Cuts Indonesian MSMEs by Almost a Half

Asosiasi UMKM Indonesia (Indonesian MSME Association/Akumindo) revealed that as many as 30 million MSMEs went out of business during the Covid-19 pandemic. To keep MSMEs afloat, Global Wakaf – ACT continues to support them through waqf-based programs.

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The Covid-19 pandemic has cut the number of MSMEs in Indonesia significantly (ACTNews/Eko Ramdani)

ACTNews, JAKARTA – The Covid-19 pandemic has posed hardships for many MSMEs in Indonesia. Asosiasi UMKM Indonesia (Indonesian MSME Association/Akumindo) revealed that as many as 30 million MSMEs went out of business during the Covid-19 pandemic. With only 34 million MSMEs remaining compared to 2019 when there were 64 million MSMEs in Indonesia, the global outbreak has cut the number of MSMEs in Indonesia by almost 50%, leaving 7 million people unemployed.

Various parties have been working to reduce the severe impact of the pandemic on MSMEs considering that MSMEs are the backbone of the Indonesian economy.  

"This is a challenge as well as an opportunity for us to develop ways to keep micro-enterprises afloat," said Productive Capital Waqf Manager Budi Sulistyo in the Wakaf Talk session on Friday (8/6/2021).

Having been running for one year, the Waqf for Indonesian Micro Business Capital has delivered waqf-funded capital to more than 3,900 micro-businesses across 25 provinces with the help of 25 ACT branch offices. "Insha Allah, in 2021, we aim to deliver waqf-based capital to 15 thousand micro-businesses," said Budi.

Budi added that the impact of the current pandemic was more severe on MSMEs compared to the crisis in 1998 as seen in many cities in Indonesia where business owners fly white flags as a form of surrender. Budi hoped that the philanthropists can have stronger solidarity for these business owners.

"We hope that the waqf donors will start to form solidarity in promoting these micro-enterprises to become the pillars of the Indonesian economy. Insha Allah, when the pious manage wealth, what will appear is a blessing, and gradually the practice of usury will be destroyed," he added. []