Co-author: Alysia Salsabila
2 minutes read
In the journey to empower Micro, Small, and Medium Enterprises (MSMEs) and cooperatives, a significant challenge arises from the low value-added and productivity within this sector. As of 2019, informal micro-businesses dominated the national business landscape, accounting for a staggering 98.67% of total business units, while small and medium-sized enterprises (SMEs) constituted just 1.32% (Kemenkop UKM, 2019).
In addressing this challenge, the Long-Term National Development Plan (RPJPN) 2025-2045 sets ambitious targets, aiming to elevate the proportion of SMEs from 1.32% to 5% by 2045. Achieving this goal necessitates transformative policies that focus on enhancing productivity. This includes encouraging formalisation, which encompasses not only business registration but also licensing, protection, and certification. Additionally, digitalization plays a pivotal role in expediting business development and the formalisation process.
Strive Learning Network: A Collaborative Hub for MSME Support
The Strive Learning Network serves as a collaborative platform for stakeholders supporting MSMEs. Initiated by the Mastercard Center for Inclusive Growth, Mercy Corps Indonesia, Ministry of National Development Planning of the Republic of Indonesia (Bappenas), and in collaboration with the Indonesia Social Impact Centre by AVPN, the network brings together ideas, explores specific topics, and collectively designs valuable solutions.
During the kick-off event held in Jakarta, Indonesia, on October 24, 2023, the Learning Network invited organisations supporting MSME digitalization in Indonesia. Members from various sectors, including government offices at both the national and sub-national levels, think tanks, private enterprises, non-governmental organisations (NGOs), and small business associations, engaged proactively in the discourse to:
- Gain better knowledge of incentives and disincentives for business formalisation to encourage MSMEs.
- Explore the potential for integrating assistance in the business formalisation process for easy access to all layers of MSMEs.
- Share experiences and best practices in supporting and providing digital access to MSMEs aiming for progress and growth.
In summary, the Business Identification Number (NIB) database holds substantial value and should be acknowledged by all government ministries and agencies. Collaboration among these entities is essential for utilising the data to shape policies and business strategies in the private sector. To achieve this, several critical steps are imperative:
- Government and relevant agencies must communicate incentives clearly to encourage MSMEs to register for the Business Identification Number and formalise their businesses.
- Equally clear communication is required about the disincentives for businesses that choose not to formalise.
- Collaboration between the private and government sectors is vital to providing tangible benefits to MSMEs opting for NIB registration or formalisation.
- For MSMEs with limited capacity, encouraging collective establishment and registration of Business Identification Numbers is essential. Clear communication about incentives and disincentives in their implementation is crucial.
- The role of implementers and accelerators is pivotal in ensuring widespread and equitable access to Business Identification Number registration.
- An integrated platform is necessary to empower MSMEs and disseminate information about business legality. While the Online Single Submission (OSS) system can be optimised for this purpose, promoting open API communication and multi-stakeholder API connections with OSS and its associated benefits is essential.