A craftsman works on a decorative lamp in Tangerang, Banten, on January 5, 2021. (SP Photo/Ruht Semiono)

Productive Aid, Digital Transformation for MSMEs to Get Back on Their Feet

BY :JAKARTA GLOBE

AUGUST 04, 2021

Jakarta. Aid distribution and digital transformation are among the government’s many strategies to help micro, small, and medium enterprises, or MSMEs, survive the pandemic.

MSMEs account for 99.9 percent of the total business units in Indonesia. Their contribution to the national gross domestic product (GDP) is at  around 61 percent. However, the prolonged Covid-19 pandemic has taken a toll on these small businesses. 

And so, the government has taken a swift response by rolling out various programs to help MSMEs remain resilient, Fiki Satari, a special staff member at the Cooperatives and SMEs Ministry, said in a statement on Tuesday. 

Among them is the financial assistance or the so-called presidential productive aid for 12.8 million micro businesses.

The government is also disbursing business loans, and about 54 percent has been absorbed. There is also a zero-percent interest for those in need. MSMEs can check out the Cooperatives Ministry official website or social media account for more details, he added.

To expand market access, the government must procure 40 percent of their goods and services from MSMEs. Over 200,000 MSMEs are now fulfilling these procurement orders. The government has also allocated 30 percent of public space, while also slashing its rent for MSMEs, according to Fiki.

Digital Transformation

With customers staying home, digital transformation has become a must for businesses. 

Digital platforms can help expand market access. Businesses can save money as they no longer need to rent an actual kiosk. With marketplaces, there is no need to write down the orders. Customer data can also come in handy when designing a new product or service, Kopi Tuku founder Andanu Prasetyo said.

According to Fiki, micro enterprises can start by making use of social media or easy-to-use apps. For instance, vendors at the fresh markets can start accepting orders by video-calls and send the groceries delivered via online ride-hailing services. Whilst small enterprises can join homogenous or local marketplaces. Medium enterprises are encouraged to embark on the larger-scale or national e-commerces.

The government has even launched an online platform —also known as “Pasar Digital UMKM” — for MSMEs to help procure goods for state-owned enterprises (SOEs).

“With ‘Pasar Digital UMKM’, the government is opening doors for MSMEs to enter the industry and SOEs’ supply chain,” Fiki said.

Creativity and Optimism

The Finery Report founder Christine Laifa called for businesses to put on their creative thinking cap amid the pandemic. 

“To be creative is to be able to solve a problem, find a solution, and understand what people need,” Christine said.

For instance, Kopi Tuku launched a one-liter bottle of coffee, so customers can easily enjoy a cup at home. 

Likewise, Andanu urged businesses to be agile, adaptive, and innovative. Although these times are challenging, the pandemic has prompted businesses to come up with ideas. The situation has even made businesses realize how important assets and loyal customers are, Adanu said.

Also, Indonesia’s spirit of togetherness and mutual cooperation, or gotong royong, plays a vital role in creating a healthy business ecosystem for MSMEs. And in their statements, Fiki, Andanu, as well as Christine all agreed that optimism and hope are crucial for MSMEs to get back on their feet.

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