Indonesia’s micro, small, and medium enterprises (MSMEs) are facing an unequal distribution of credit from the banking sector, according to Chairman of Muhammadiyah Anwar Abbas. He issued a strong critique of this practice, calling it “unconstitutional” and a violation of the core values enshrined in the Pancasila and the 1945 Constitution.
In a statement released Friday, February 16, Anwar Abbas argued that the current system, allocating 70% of bank loans to large corporations while leaving only 30% for the vast majority of MSMEs (99.99% of businesses), contradicts the principles of economic democracy and equitable efficiency outlined in Article 33 of the Constitution.
“MSMEs, employing over 64 million individuals and accounting for 98.68% of all businesses, are crucial for national economic development,” said Anwar Abbas. Marginalizing them, he asserted, not only stifles individual livelihoods but undermines national progress.
“The current allocation of credit by banks reflects a liberal economic philosophy at odds with our national identity and constitutional mandate,” Anwar Abbas stated. “It is imperative that both the government and the banking sector prioritize the needs of the majority and ensure equitable access to financial resources for MSMEs.”
Moreover, Anwar Abbas highlighted the need for nuanced support within the MSME sector itself. He cautioned against neglecting the most vulnerable – the ultra-micro and micro businesses – emphasizing that any financial assistance should reach all levels of the sector effectively.
This critique by Anwar Abbas underscores a critical issue impacting Indonesia’s economic landscape. His call for a fundamental shift in lending practices resonates with the aspirations of millions of Indonesians yearning for a more equitable and inclusive economy. Whether the banking sector heeds this call remains to be seen, but it has undoubtedly brought the spotlight onto their current practices, demanding a response that aligns with the spirit of the Constitution and the needs of the nation’s economic engine: its small businesses.
