Indonesia Receives US$5.5 Million Grant from South Korea to Improve SMEs

TEMPO.CO, Jakarta - The Indonesian government received grants amounting to US$5.5 million (equivalent to 7.2 billion South Korean won or around Rp84 billion) from South Korea to increase the capacity of small and medium enterprises (SMEs).

The grant is in the form of collaboration on smart factory adoption and training for human resources worth US$5.5 million.

Deputy for Small and Medium Enterprises (UKM) of the Ministry of Cooperatives and SMEs, Hanung Harimba Rachman, stated that the Official Development Assistance Project (ODA) collaboration between the Indonesian and South Korean governments aimed at helping local SMEs adopt the industrial ecosystem 4.0 to enter the industrial supply chain.

"This is a collaborative step to help SMEs in adopting the industrial ecosystem 4.0, applying smart factories, Internet of Things (IoT), and Artificial Intelligence (AI) technology to enter the manufacturing industry supply chain. This is an important step, especially since South Korea is superior in the manufacturing industry," said Rachman after the signing of a memorandum of understanding (MoU) between the Ministry of Cooperatives and SMEs and the INNOBIZ Association of South Korea regarding the ODA Project in Jakarta, on Tuesday.

The South Korean government initiated cooperation with the Indonesian government to support the development of SMEs through the "ODA Project: Project for Supporting the Transformation into Smart Factory and Training Specialized Manpower in Java Province for Innovation in Indonesian Manufacturing Industry."

Under this project, 30 SMEs will be recommended by the ministry to receive training on adopting smart factories at universities. In addition, training will be conducted for 100 experts on smart factory operations through a collaboration that will last for the next four years, Rachman elaborated.

He stated that the program targeted SMEs in the automotive, manufacturing, food and beverage, textile, electronics, chemical, and agricultural sectors.

Meanwhile, Policy Head of INNOBIZ Institute, Se-jong Kim, explained that a smart factory service center will be built at the Indonesian university to facilitate the program with the training curriculum.

"We have built 30 thousand smart factories in South Korea. We will invite them to Indonesia to share experiences, or vice versa, they can also visit South Korea directly. We hope this program can increase SMEs' capacity in Indonesia," Kim stated.

It is hoped that the collaboration with INNOBIZ, which is an SME certification institution in South Korea, can assist the Indonesian government in developing schemes, research, and policies related to SME certification in accordance with the business ecosystem in Indonesia.

Hopefully, the certification for SME entrepreneurs will become an asset for them to avail various facilities, including obtaining access to financing from banking institutions and other alternative sources of financing that are based on credit scoring, Rachman stated.

ANTARA

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