The Indonesian Association of Islamic Economists (IAEI) together with BLU Pusat Investasi Pemerintah (PIP) held a Webinar on the Expansion of Sharia Microfinance through the Synergy of the Central Government and Regional Governments, in a hybrid manner on Tuesday (28/6). The webinar was attended by Dr. Wempi Saputra as Deputy Secretary General II of IAEI, Ririn Kadariyah as President Director of BLU PIP as well as Deputy Chairperson of the IAEI Sharia Microfinance Development Division, Dr. Ahmad Juwaini as Chairperson of the IAEI Sharia Microfinance Development Division, H. Aminullah Usman as Mayor of Banda Aceh, Dr. Bahri as Director of Regional Budget Planning Directorate General of Regional Finance Development of the Ministry of Home Affairs and Teuku Hanansyah as President Director of PT LKMS Mahirah Muamalah.
Dr Ahmad Juwaini in his speech revealed the important role of MSMEs in providing a safety net for the national economy that can continue to roll and support low-income communities. MSMEs also play a role in maintaining the momentum of economic growth through participation in gross domestic product (GDP) of 61.97 percent, or worth 8.6 trillion rupiah which absorbs 97% of the workforce and has the ability to integrate investment of 60.4 percent in 2021.
In his presentation, Dr Wempi Saputra emphasised that one of the biggest challenges faced by UMi businesses is related to capital, which occurs not only in Indonesia, but also almost all over the world due to limited financial literacy, access to information and education. Therefore, financing programmes that focus on targeting Ultra Micro Enterprises are very important. Ultra Micro Financing is a financing programme for the lowest level of micro businesses.
In her presentation, Ririn Kadariah explained the characteristics of micro businesses, some of which do not have business legality, their businesses are still run by individuals, the type of commodity is not fixed, and they have not implemented good administration and become one of the obstacles to getting access to finance, especially bank financing (unbankable). Therefore, to target micro businesses, ultra-micro financing is channelled through existing non-bank financial institutions that have joined as UMi distributors.
Because it is a state budget fund whose funds must be channeled back to the community, so that more people can access financing, it must maintain good governance. In addition, mentoring ultra-micro business actors is very important both in managing their finances and increasing the capacity of business actors, so that the distribution of UMi can continue to grow positively.
"Microfinance must be able to create a fund that is revolving or revolving and can be upgraded, to be able to access KUR (Kredit Usaha Rakyat) which has a higher ceiling so that the business can be more advanced." concluded Dr. Wempi Saputra, Deputy Secretary General II IAEI.
