Synergy Between BKPM and Kemenkop UKM as a Step Towards MSME Development

On Thursday, September 17 of 2020, the Investment Coordinating Board (BKPM) and Ministry of Cooperatives and SMEs (Kemenkop UKM) officially signed a Memorandum of Understanding that examines the Programs and Regulations Synergy for the Development of Micro, Small and Medium Enterprises and Cooperatives (UMKMK).

BKPM and Kemenkop UKM have previously worked hand in hand for the development of MSMEs and cooperatives in Indonesia ever since the pandemic began. Fortunately, the partnership between BKPM and Kemenkop UKM has resulted in good payoffs, leading the two institutions to continuously expand their partnership to a more intensive level in order to bring greater impacts for the MSMEs and cooperatives scenes.

The scope of this MoU includes data and information exchange, partnership facilitation between MSME and cooperative with investors, as well as MSME and cooperative development (increasing the capacity of MSME and cooperative entrepreneurs). Here is the complete update.

In Line with the Presidential Executive Orders

The growing intensity of the partnership between BKPM and Kemenkop UKM is a measured step to execute the orders from the President of Indonesia, Joko Widodo. BKPM and Kemenkop UKM have agreed to align their structured regulations and programs as initiatives for the development of MSMEs and cooperatives in Indonesia. This also coordinates with the central government initiatives to make it easier for Indonesians to become entrepreneurs.

As stated in Presidential Instruction (Inpres) No. 7 of 2019 concerning the Acceleration of Ease of Doing Business, now Indonesians are able to register their business more easily. The registration is facilitated by BKPM with the Online Single Submission (OSS) system. Hopefully, the synergy between BKPM and Kemenkop UKM can further encourage people to be entrepreneurs as well as boost the development of existing MSMEs and cooperatives so that they can rise to the next level.

Cumulatively, up until October 2020, BKPM Investment Control and Command Center (Pusat KOPI) recorded 1 million of Business Identification Number (NIB) submissions throughout 2020. The NIB submissions have significantly increased in October 2020, breaking this year’s highest records of 377,540 submissions where 93.6% of them came from MSMEs (353,748 NIB). This data have also become the golden gateway for Indonesian economy as we’re entering 2021, as we know that 60% of Indonesia’s Gross Domestic Product (PDB) are generated from MSMEs.

Data and Information Exchange Between BKPM and Kemenkop UKM

The data and information about foreign and domestic investor profiles, from the smallest to the highest scale of investments, will be accessible for Kemenkop UKM. Furthermore, BKPM will also share data pertaining to business permits for MSMEs that have been submitted through OSS. Meanwhile, Teten Masduki as the Minister of Cooperatives and SMEs in Indonesia explained that Kemenkop UKM will provide the complete profiles of MSMEs and cooperatives as potential candidates to be invited into partnerships with recorded investors from BKPM data.

This synergy is expected to accelerate the partnership progress between investors and local MSMEs. In accordance with BKPM Key Performance Indicator (KPI), every major investor who enters Indonesia is required to join with MSMEs in partnerships. Moreover, this synergy is a record breaking one as BKPM will now have a crucial role in legally licensing MSMEs. Subsequently, BKPM and Kemenkop UKM have also planned to construct an official MSME database that will help the MSME digitalization in Indonesia.

Superior Facilitation of Investor Relations with MSME Entrepreneurs

The partnership between BKPM and Kemenkop UKM officiated by this MoU will not only last for one or two periods, but hopefully will continuously develop for a long period of time. This synergy binds BKPM and Kemenkop UKM to help each other, give constructive inputs, provide consultation, and assistance when planning for new regulations and programs, such as the financing, digitization, and legality aspects of MSMEs and cooperatives.

Therefore, BKPM and Kemenkop UKM will utilize workshop forums, socialization, technical guidance, seminars on capital investment, and OSS Clinic which will be held by both parties.

Afterwards, this synergy aims to connect the right investor with the MSME and cooperative that suits them. The MoU oversees this investor matchmaking facility through seminars, business forums, market sounding, and visits. BKPM and Kemenkop UKM are focused on perfecting the product standardization and marketing performed by local MSMEs and cooperatives.

The Development of MSMEs and Cooperatives

The third scope of this MoU is the development of MSMEs and cooperatives. The development that the MoU regulates is the escalation of MSME and cooperative entrepreneurs’ capacity. The MoU oversees the initiatives from BKPM and Kemenkop UKM in growing Indonesia entrepreneurs. This means that every investment that enters a specific region will not only increase the region’s economy, but also create new entrepreneurs. Therefore, BKPM and Kemenkop UKM are committed to increase the capacity of MSME and cooperative entrepreneurs regarding procedure, investment permit regulations, as well as business management.