Picture (left to right): Aileen Goh, President Director of Mastercard Indonesia; Maliki, Deputy for Population and Employment, Ministry of National Development Planning; Ade Soekadis, Executive Director Mercy Corp Indonesia; Dewi Meisari, CEO of Tumbu; Charlie Hartono, Country Director of AVPN; Ditto Prabowo Widigo, Chief Digital Product of Hibank; Mahatma Parwitasari, Director of MSMEs & Cooperatives Development, BAPPENAS; and Nur Hasan, Social Impact Manager of Mastercard Centre for Inclusive Growth
5 minutes read
The Strive Learning Network, an integral part of the Strive Indonesia Program initiated by the Mastercard Centre for Inclusive Growth, has recently launched a comprehensive report on the state of micro and small enterprises (MSEs) in Indonesia. This report, created in collaboration with the Ministry of Planning and National Development Indonesia, Mercy Corps Indonesia, and the Indonesia Social Impact Centre by AVPN, was meticulously researched and compiled by 60 Decibels. It provides crucial insights into the challenges and opportunities faced by MSEs in Indonesia, highlighting key areas for intervention and support.
Digital Literacy Enhancement
A significant focus of the report is the enhancement of digital literacy among MSMEs. While 70% of MSEs express confidence in using digital tools, there remains a notable gap, with 64% uncertain about which tools are most suitable for their specific business needs. This finding underscores the necessity for tailored training programs that can help MSEs navigate the digital landscape more effectively. Practical recommendations for digital skills and tools include training in social media marketing, e-commerce platforms, digital payment systems, and data analytics. For example, teaching MSMEs how to use social media platforms like Instagram and Facebook for marketing can help them reach a broader audience and increase sales. Similarly, understanding how to set up and manage an online store on platforms like Shopee can open new revenue streams. A case study of juragan DOKU, a digital platform, demonstrates how small businesses can optimise inventory and expand their payment options through digital tools. Additionally, offering customised digital literacy training can empower MSEs to leverage technology more efficiently, driving growth and competitiveness.
Accessible Support Services
The report reveals a clear demand for training in business management, digital marketing, and financial skills, with nearly 70% of MSEs recognising the importance of these areas. However, only about a third have accessed these support services. This discrepancy highlights the need to make essential support services more accessible and tailored to the unique needs of each business. To bridge this gap, a collaborative effort is essential, involving the government, private sector, and non-profit organisations. Governments can create enabling policies and provide acknowledgment for training programs, while private companies can offer funding, expertise, technology, and mentorship opportunities. Non-profit organisations can act as intermediaries, connecting MSEs with resources and advocating for their needs. An example of such collaboration is the physical support service through Integrated Business Service Centers (PLUT) and Rumah BUMN, as well as digitally through platforms like MicroMentor, which offers digital mentoring, and Tumbu.co.id, which provides self-training materials and live mentoring. By working together, these sectors can ensure that MSEs receive the training and resources necessary to thrive in today’s competitive market.
Credit Access Facilitation
Access to credit remains a significant challenge for many MSEs. The report indicates that the majority of MSEs have not utilised credit or loans in the past year, primarily due to a lack of need (62%) or the inability to afford it (28%). To address this issue, simplifying the loan application process, enhancing financial literacy, and providing affordable credit options are critical strategies. Financial service providers should iterate their products to better suit MSMEs by designing user-friendly interfaces, offering flexible repayment terms, and creating products specifically tailored to the unique cash flow needs of small businesses. For instance, fintech companies like Amartha developed microloan products designed to meet the specific needs of women entrepreneurs, and HiBank developed microloan products that cater to smaller loan sizes with repayment periods adjusted to the needs of MSEs.
On the demand side, there is a pressing need to educate MSMEs about the benefits and responsible use of credit to avoid misconceptions and build trust in financial services. This can be achieved through targeted financial literacy programs that explain the loan process, the importance of maintaining good credit, and how to effectively utilize borrowed funds for business growth. By facilitating easier access to credit and ensuring MSEs are well-informed, they can invest in their growth and sustainability, contributing to broader economic development.
Gender-Sensitive Approaches
The report also emphasizes the importance of adopting gender-sensitive approaches when designing interventions for MSEs. Understanding and addressing the unique challenges faced by women-led MSEs is crucial for creating impactful and inclusive support programs. By maintaining a gender-sensitive lens, policymakers and support organisations can ensure that interventions are equitable and effective, fostering an environment where all entrepreneurs can succeed.
Conclusion
The findings of the Strive Learning Network’s report provide a roadmap for empowering MSEs in Indonesia. By focusing on enhancing digital literacy, making support services more accessible, facilitating credit access, and adopting gender-sensitive approaches, we can create a more inclusive and supportive ecosystem for MSEs. These efforts will not only benefit individual businesses but also contribute to the overall economic development of Indonesia. As we move forward, it is essential to continue these collaborative efforts and invest in the growth and sustainability of MSEs, driving positive social and economic change across the country.
Access to full report is here.
About Strive Learning Network
Strive Learning Network is a collaborative initiative led by Mastercard Center for Inclusive Growth, the Ministry of National Development Planning (Bappenas), and Mercy Corps Indonesia, in partnership with the Indonesia Social Impact Center (ISIC) by AVPN. This platform aims to strengthen the ecosystem of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Through the Strive Learning Network, various stakeholders committed to supporting the economic transformation agenda can gather and collaborate. The network provides a means for sharing knowledge and experiences, as well as conducting group discussions to identify the challenges and opportunities faced by MSMEs.
Focusing on the development and empowerment of MSMEs, Strive Learning Network plays a crucial role in accelerating inclusive economic growth in Indonesia. Through a series of knowledge-sharing activities and group discussions, participants can share best practices, innovative strategies, and effective solutions to support MSME advancement. Additionally, Strive Learning Network will provide recommendations to the Ministry of National Development Planning to inform their process of formulating the RPJMN 2025-2029, ensuring that the needs and challenges of MSMEs are adequately addressed in the national development agenda.
