Jakarta, 6 Desember 2024 – Indonesian MSMEs Compete with Large Companies on the International Stage. Data shows that Indonesian Micro, Small, and Medium Enterprises (MSMEs) are highly active in conducting international transactions for goods and services, reflecting their global reach. According to data from Mekari, a software-as-a-service (SaaS) company facilitating international transactions for businesses, over half of international transactions in foreign currency are carried out by MSMEs compared to large companies.
Jansen Jumino, Chief Business Officer of Mekari, stated that with the increasing globalization of business, Indonesian companies are increasingly connected with international partners, not only for goods but also for services. “Indonesian MSMEs, as a significant segment of the Indonesian economy, are becoming more integrated into the global business network. Technology enables them to collaborate with international partners, serving as both suppliers and buyers. One highly impactful technology is financial technology, which simplifies global foreign currency transactions,” he said. He then highlighted intriguing trends based on Mekari’s data regarding international transactions by MSMEs in Indonesia.
The Majority of Foreign Transactions are Conducted by MSMEs
Based on volume, up to 60% of foreign currency transactions are carried out by MSMEs compared to large companies. MSMEs actively engaging in foreign currency transactions are often those already venturing into or established in international markets. “These MSMEs are not only involved in exporting and importing goods but also in providing services, as many jobs and projects can now be carried out remotely or virtually,” he explained.
Eight Transactions on Average per Month
On average, MSMEs perform foreign currency transactions eight times a month. The three most common types of transactions are for trade payables, banking activities, and business expenses. “Most foreign currency transactions by MSMEs involve payments to suppliers or vendors, ranging from raw materials to finished products, abroad. In banking, some MSMEs utilize overseas bank credit facilities for funding purposes,” he added.
71% of Transactions Conducted in USD
In terms of volume, the US dollar (USD) dominates, accounting for 71% of foreign currency transactions by MSMEs. The next most commonly used currencies are the Chinese yuan renminbi (CNY) and the Euro (EUR). “The dominance of the USD aligns with the destination countries for foreign currency transactions, particularly the United States. This indicates that the US remains a significant market and trading partner for Indonesia,” he continued.
Q1 as the Peak Transaction Period
Data indicates that the first quarter, particularly January, is when the volume of foreign currency transactions by MSMEs spikes sharply before leveling off in the following quarters. “The fluctuations in foreign currency transaction volumes reflect the business cycles of MSMEs, where the beginning of the year is the time for annual payments to suppliers or vendors,” he explained.
Jansen advised Indonesian MSMEs to leverage payment technologies connected to overseas banking services to facilitate quick, easy, and secure foreign currency transactions. Mekari Jurnal’s financial solutions offer multi-currency features that simplify transactions in various foreign currencies, from USD to yuan. In addition to currency conversion, solutions from Mekari and its technology partners, including Nium, enable the sending, receiving, and storing of foreign currencies into company-owned bank accounts. “Global payment solutions supported by efficient and secure infrastructure will facilitate smooth international transactions, ensuring the seamless flow of goods, services, and finances. This way, businesses can maintain operational stability and productivity,” he concluded.
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