Depok-The Universitas Indonesia (UI) Vocational Education Program initiated a model for ranking MSMEs to obtain guarantees and banking credit in Focus Group Discussion (FGD) activities held on December 15-16, 2023. The FGD presented various practitioners from the Financial Services Authority (OJK), guarantee institutions and MSMEs players. Apart from that, discussions regarding the importance of the MSMEs credit rating application model, the challenges faced, and solutions and follow-up actions that could be implemented were also discussed at the meeting.
The MSMEs credit rating application model is one of the efforts to increase access to MSMEs financing. This model can be used by guarantee institutions and banking or financing institutions to assess the creditworthiness of MSMEs. It is because MSMEs have an important role in the Indonesian economy. Referring to data released by the Coordinating Ministry for Economic Affairs of the Republic of Indonesia in 2023, MSMEs contributed 61.07% to Indonesia’s Gross Domestic Product (GDP) and absorbed 97.2% of the workforce.
Dede Suryanto, S.Sos., M.Si., one of the lecturers and researchers at the UI Vocational Banking and Financial Administration study program, said that access to MSME financing is still not evenly distributed to date. It is caused by various factors, namely the lack of financial literacy and understanding of MSMEs about financing products, strict credit requirements from banks, and the low value of collateral held by MSMEs. “The MSMEs rating application model can be a solution to overcome the challenges of access to capital for MSMEs and can help guarantee institutions to assess the feasibility of credit guarantees for MSMEs more objectively and transparently,” said Dede.
The FGD also discussed the challenges faced in developing the MSMEs credit rating application model. These challenges include the availability of quality MSMEs data, expertise in data analysis and supporting regulations, especially regarding rating institutions which must have OJK permission.
(Photo: FGD activities carried out by UI researchers, practitioners from OJK, guarantee institutions and MSMEs actors)
Beside that, various factors that can be used in the MSMEs credit rating application model are the MSMEs business profile, such as type of business, turnover and profitability; MSMEs financial capabilities, such as financial condition, cash flow and debt; as well as the quality of MSMEs management, such as the experience and skills of business managers.
Apart from these factors, the MSMEs credit rating application model also considers other quite important factors, namely the personality aspect or character of MSMEs actors which is measured through psychometric tests. This model is also equipped with historical credit records via SLIK and other scoring results. Diding S. Anwar, an Indonesian credit guarantee expert who is also the Chair of the Risk Governance Center Guarantee Division of the UI Faculty of Administrative Sciences, said that the rating model has quite comprehensive parameters. Thus, the model is expected to have accuracy that is more in line with the risk profile of MSMEs. Diding hopes that this application can also encourage MSME players to take advantage of credit guarantee facilities, both cash loans and non-cash loans.
Based on the results of the FGD, there are several important points to support the development of the MSMEs credit rating application model, namely that universities need to develop development roadmap of an MSME ranking application with several important notes, such as the model must accommodate all conditions and needs of financing schemes for MSME players, both individual (micro or ultra micro) and MSMEs, which already have business entities. Then, form appropriate institutions referring to POJK Number 2/POJK.05/2017 concerning the Implementation of Guarantee Business and the need to foster cooperation and synergy with various parties, such as guarantee institutions, banks, MSMEs associations, and related ministries or government institutions.
