Contribution Of MSMEs In Poverty Alleviation In Indonesia
DOI:
https://doi.org/10.37812/aliqtishod.v14i2.2488Keywords:
MSMEs, poverty reduction, economic empowerment, KUR, inclusive economy, Indonesia 2026.Abstract
Poverty remains a fundamental challenge in Indonesia's economic development despite a decline in recent years. Poverty is not only related to low income, but also limited access to jobs, education, health, productive assets, financing, markets, technology, and basic services. In this context, Micro, Small, and Medium Enterprises (MSMEs) have a strategic role because they are the majority of business units as well as the largest absorbers of labor. This article aims to analyze the contribution of MSMEs to poverty reduction in Indonesia by 2026, identify the challenges faced, and examine the role of government policies in strengthening MSMEs as an instrument of inclusive development. The research uses a qualitative descriptive approach through literature studies and secondary data analysis from BPS, the Coordinating Ministry for Economic Affairs, and academic literature. The results of the study show that Indonesia's poverty rate in March 2026 will reach 8.07 percent or 22.93 million people. MSMEs contribute around 61 percent to GDP and absorb 97 percent of the workforce. KUR disbursements until June 28, 2026 reach IDR 147.70 trillion to 2.32 million debtors. However, financing needs to be integrated with digitalization, capacity building, market access, formalization, innovation, and assistance to increase productivity, income, and economic resilience of the poor and vulnerable
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