The importance of SME/MSMEfor the growth of Indonesia

What definition of SME/MSME Indonesia? Which is currently can not be

underestimated in the world economy. Though no doubt SME/MSME turned out to
have an influential role in the Indonesian economy. Evidently when the monetary
crisis in 1997, when one by one big company collapsed, MSME business just did
not falter and instead become the backbone of the economy at that time. MSME
or Micro, Small and Medium Enterprises is the foundation of Indonesia's
economic development. MSME are regulated under Law Number 20 of 2008 on
Micro, Small and Medium Enterprises.

The definiton of MSME is listed in the Law Number 20 of 2008 on Micro,

Small and Medium Enterprises. Micro Business is a Productive Business
Opportunity owned by an individual or business entity that fulfills the criteria of
Micro Enterprises as stipulated in this Law. Small Business is an Opportunity for
productive and independent economic enterprises for individuals or individuals
who are not subsidiaries or non-branches of a company owned, controlled or part
of a direct or indirect business of a business of Small and Medium Enterprises as
referred to in the Law this.
Medium Enterprise is a stand-alone productive economic enterprise, carried out
by an individual or business entity that is neither a subsidiary nor a branch of a
company owned, controlled, or shared directly or indirectly with a Small or Large
Business with a net amount or net worth of sales proceeds Yearly as regulated in
this Law.

MSME has several criteria that are divided into Micro, Small and Medium
Enterprises. Micro Business Opportunity has maximum assets of Rp 50 million
and a maximum turnover of Rp 300 million / year. Small Business Opportunity
has assets above Rp 50 million-Rp 500 million with turnover Rp 300 million-Rp
2.5 billion / year. Medium Business Opportunity has assets above Rp 500 million-
Rp 10 billion with turnover Rp 2.5 billion -Rp 50 billion / year.

Based on the development of SME/MSME in Indonesia Differentiated into 4

Criteria. first is Livelihood Activities, is a Small and Medium Business that is used
as a job opportunity to earn a living, which is more commonly known as the
informal sector. Examples are street vendors.
second is Micro Enterprise, is a Small and Medium Enterprises that has a
craftsmanship but has no entrepreneurial character. the third is Small Dynamic
Enterprise, is a Small and Medium Enterprises that already has an
entrepreneurial spirit and is able to accept subcontract and export work
the fourth is Fast Moving Enterprise, merupakam Small and Medium Enterprises
that already have entrepreneurial spirit and will make the transformation into a
big business (UB).