Bank Indonesia says Islamic banking can help SMEs compete

Bank Indonesia (BI) has acknowledged a new challenge for the national economy – the rise of global small and medium enterprises (SME) and their increased penetration of the local domestic market. According to BI, in order to compete, local SMEs need to be strengthened through massive financing, including through Islamic banking. The challenge is getting more serious as the economy opens up with developments like the Asean Economic Community (AEC) agreement, which will come into effect soon, leading to massive corporate foreign investments that will bring foreign SMEs to Indonesia, BI deputy governor Perry Warjiyo said.