More than four in five Indonesian SMEs back to normal operations

Over four-fifths of Indonesian small and medium-sized enterprises (SMEs) have started to operate normal full hours, according to a March-April survey by the Mandiri Institute, an affiliate of Indonesia's second-largest lender Bank Mandiri.

The survey of 505 respondents across Indonesia highlights the increasing confidence among consumers and businesses that South-east Asia's largest economy has managed to curb Covid-19 infections and has stepped up its vaccination programme.

It revealed that 84.8 per cent of businesses have started operating normally.

This compares with 35.2 per cent with normal operating hours in the middle of last year, when 34.5 per cent of them operated on limited hours and 30.4 per cent were forced to close temporarily.

As many as 49 per cent of the respondents run their business in Java, the most populous island, while 22 per cent are in Sumatra, 16 per cent in Kalimantan, and the remaining across the nation.

Indonesia yesterday reported 5,797 new Covid-19 cases to bring the tally to 1.76 million.

Total daily caseloads have trended down in the past few months, and 5.06 per cent of the population has been vaccinated.

The government aims to inoculate 70 million people by September and 181.5 million people, or 67 per cent of its population, by next year to achieve herd immunity.

The Health Ministry has roped in police and military personnel across the country's 34 provinces to help ensure that people comply with health protocols.

According to the Mandiri Institute survey, small businesses in Indonesia have retrenched between two and four people since the pandemic started, while medium-sized businesses cut headcount by an average of 18.

Small businesses are those with annual revenues of up to 2.5 billion rupiah (S$234,000), while medium enterprises' revenues exceed 2.5 billion rupiah, up to 50 billion rupiah a year.

"The consumer confidence index in April, for the first time in the past year, showed consumers' expectations on the economic condition turned optimistic," Mr Panji Irawan, a Bank Mandiri director, said on Wednesday.

Total loans extended by Mandiri for the year ended March 31 rose at an annual pace of 9.1 per cent, while funds placed by depositors and clients at the bank rose 25 per cent.

Bank Mandiri attributed the improved performance to a low interest rate environment, temporary value-added tax exemptions on vehicle purchases and relaxed rules on taking out loans.

Indonesia's benchmark interest rate is currently at a record low of 3.5 per cent.

Indonesia has 87,514 active Covid-19 cases, a significant decline from around 177,000 at the peak in early February.

The country is the hardest-hit by the pandemic in South-east Asia.

The proportion of Indonesia's total population that has received at least one dose of a vaccine as at Monday was 5.06 per cent, according to and SDG Tracker, a joint effort between the University of Oxford and non-profit organisation Global Change Data Lab.

The figure for Indonesia is the highest among countries in South-east Asia with a population of more than 20 million.

Malaysia recorded 3.77 per cent, Thailand 2.18 per cent, the Philippines 2.05 per cent and Vietnam 0.98 per cent.

Myanmar had 3.11 per cent as at May 4, the latest data available.

Meanwhile, the figure for Singapore is 32.48 per cent.

A version of this article appeared in the print edition of The Straits Times on May 21, 2021, with the headline 'More than four in five Indonesian SMEs back to normal operations'. Subscribe