Number of Indonesian MSMEs 2018-2023

Data from Indonesian Micro, Small, and Medium Enterprises (MSMEs) and the Indonesian Chamber of Commerce and Industry (Kadin), processed by the Financial Services Authority (OJK), shows fluctuations in the number and growth of Indonesian MSMEs since 2018.

In 2018, the number reached 64.19 million businesses. This figure then grew by 1.98% to 65.47 million businesses in 2019.

Entering the Covid-19 pandemic in 2020, the number fell by 2.24% to 64 million.

Despite this, the number resiliently grew by 2.28% to 65.46 million in 2021. However, in 2022, the number decreased by 0.7% to 65 million.

The latest data in 2023 shows MSME growth of 1.52%, reaching 66 million – the highest in the last six years.

The OJK states that MSMEs play a significant role in Indonesia's economic growth, considering their proportion of 99% or 66 million businesses out of the total number of business units, and their ability to absorb up to 97% or 117 million workers out of the total workforce.

However, according to the OJK, the contribution of MSMEs to the creation of economic added value is still relatively low, reaching 61% of Indonesia's GDP or the equivalent of Rp9,580 trillion.

The OJK also explains that the MSME sector has been faced with several challenges. These challenges relate to innovation and technology, digital literacy, productivity, legality or licensing, financing, branding and marketing, human resources, standardization and certification, equitable guidance, training, and facilitation, and a single database.

"This sector is not directly involved in the formation of the country's per capita income, but MSMEs are closely linked to the development of the people's economy and play a very important role in forming the Regional Gross Domestic Product (PDRB) and regional economic growth," wrote the OJK in a report quoted on Monday (14/10/2024).

(Also read: [Medium-Sized Businesses, MSMEs with the Highest Non-Performing Loan Ratio](https://databoks.katadata.co.id/keuangan/statistik/669f597378816/usaha-menengah-umkm-dengan-rasio-kredit-macet-tertinggi))