JAKARTA (ILO News) – The International Labour Organization (ILO) is launching the implementation of the second phase of the “Promoting Small and Medium Enterprises through Entrepreneurs’ Access to Financial Services” programme (Promise II Impact) today in Jakarta (2/3). The programme is officially launched by Mahendra Siregar, Chairman of the Commissioner Board of the Financial Services Authority (OJK), Ferry Irawan, Acting Deputy for Microeconomics and Finance Coordination of the Coordinating Ministry for Economic Affairs, Philippe Strub, Deputy Head of Mission of the Embassy of Switzerland in Indonesia and Michiko Miyamoto, Country Director of ILO for Indonesia.

The Promise II Impact, funded by the Swiss State Secretariat for Economic Affairs (SECO), is aimed to strengthen an enabling environment for an inclusive financial sector for SMEs that lead to economic growth and improved employment opportunities, particularly in the post-pandemic situation. The programme also supports the priority of the Indonesian government to promote the digital economy as well as be aligned with the government’s post-pandemic economic recovery policies and programmes on fostering digital transformation and increasing financial inclusion, including the financing of SMEs.

To achieve the above goals, the programme supports SMEs to make the best use of the Digital Financial Services and to enhance their value chain ecosystem with digital technology adaptation specifically developed for SMEs in productive sectors. In addition, the programme builds the capacity of and provides digital technology support for regional development banks (BPD) and rural bank (BPR) as the main target, with the additional target to SME entrepreneurs and business development service providers.

Michiko Miyamoto, Country Director of the ILO for Indonesia, stated that SMEs play an important role in creating decent and productive employment in the country. However, SMEs still face challenges in accessing the market and financial services. “SMEs are vital to achieving decent and productive employment as they account for two-thirds of all jobs and create most new jobs. Therefore, promoting SMEs has been one of the ILO’s priorities to assist them in improving their competitiveness and productivity as well as accelerating their business recovery through digitalization,” she said.

To provide greater access for SMEs to digitalization, the Promise II Impact focuses on four strategies as the following: 1. Enhancing the application of digital technology to improve SMEs’ productivity and scale of the business; 2. Supporting the adoption of digital technology by BPD and BPR; 3. Enhancing the existing SME’s value chain ecosystem through digitalization, expansion of buyers, and better access to finance; and 4. Collaborating with regional governments to support regional economic recovery policies and programmes targeted to SMEs and financial services.

Djauhari Sitorus, Programme Manager of Promise II Impact, said the through digital technology, access to financial services can reach the society in rural and isolated areas, including low-income community groups and SMEs. “We need to have a good and effective digital transformation process from both actors of financial services and SMEs. The Promise II Impact aims to help smoothen this process in order to improve access to digital finance for SMEs through financial services,” Djauhari stated.

The Promise II Impact, which will be held until 2025, is the continuation of the first phase of Promise Impact aimed to promote the development of SMEs in Indonesia and to provide them with greater access to financial services. Also funded by SECO, the first phase was conducted for four years from the year of 2015 to 2019 in collaboration with OJK, BPD, and BPR.

“The Swiss Government is committed to supporting the development of SMEs in Indonesia – the backbone of the country’s economy – through unlocking access to finance and boosting digital transformation. We are convinced that Promise II Impact will make a significant contribution to Indonesia’s financial inclusion agenda and support SMEs in realizing their growth potential,” said Philippe Strub, Deputy Head of Mission, Embassy of Switzerland in Indonesia.

For further information, please contact:

Tomas Sugiono
ILO’s National Coordinator of Promise II Impact
Email: sugiono@ilo.org

Gita Lingga
ILO’s Communication Officer
Email: gita@ilo.org