Indonesian Parliament Backs Higher Budget for Small Business Development

RRI.CO.ID, Jakarta - Indonesia’s House of Representatives has expressed support for a proposed increase in the budget of the Ministry of Micro, Small and Medium Enterprises (MSMEs) for the 2027 fiscal year. The House stated the additional funding is needed to strengthen entrepreneurship programs and support economic resilience amid global uncertainties.

The proposal was discussed during a parliamentary hearing between Commission VII of the House of Representatives and the Ministry of MSMEs in Jakarta on Thursday, June 11, 2026. The meeting reviewed the ministry’s 2027 work plan and budget priorities.

Commission VII endorsed a proposed budget increase of IDR 1.52 trillion (approximately US$93 million). The panel also urged the ministry to coordinate with the Ministry of Finance and the National Development Planning Agency (Bappenas) to secure the additional funding.

“Commission VII supports the proposed additional budget for the Ministry of MSMEs for the 2027 fiscal year and urges the ministry to discuss its realization with the Ministry of Finance and Bappenas,” Deputy Commission Chairperson Lamhot Sinaga said.

According to him, the additional budget would help support the government’s Productive Social Welfare Program, which aims to assist 10 million entrepreneurs and workers by 2029. The initiative includes entrepreneurship training, skills development, access to financing, market expansion, product certification, and innovative financing schemes.

The parliamentary committee noted that strengthening the MSME sector is particularly important as Indonesia faces slowing global trade, economic uncertainty, and pressure on household purchasing power. MSMEs account for more than 60 percent of the country’s gross domestic product and employ around 97 percent of Indonesia’s workforce.

Lamhot also called for increased funding for digital transformation programs and stronger support for businesses affected by natural disasters and global economic pressures. They further encouraged the integration of MSME development initiatives with other government community-based economic programs.

In addition, the committee urged the ministry to expand access to business licensing, halal certification, and microfinance programs, including the government-backed People's Business Credit (KUR) scheme. Parliament said these measures are essential to improving competitiveness, expanding market access, and creating new economic opportunities across the country.