research demographics

Quantitative Demographics

Gender Distribution
MSMEs
Startup
Total Owners Interviewed:
300
Total Owners Interviewed:
24
Highest Education Attainment
MSMEs
Startup
Total Owners Interviewed:
297
Total Owners Interviewed:
24
Owner's Age
MSMEs
Startup
Total Owners Interviewed:
294
Total Owners Interviewed:
23
Marital status
MSMEs
Startup
Total Owners Interviewed:
299
Total Owners Interviewed:
23
Number of Dependent(s)
MSMEs
Startup
Total Owners Interviewed:
202
Total Owners Interviewed:
22

Qualitative Demographics

Education
Total Owners Interviewed:
12
Gender
Total Owners Interviewed:
12
SEC
Total Owners Interviewed:
12
Industry
Total Owners Interviewed:
12
Size
Total Owners Interviewed:
12
Age
Total Owners Interviewed:
12

Codesign Demographics

Name
No
organisation
position
category
Priority Area 1: How might we support MSMEs to develop strong and up-to-date market and industry knowledge?
1
Olansons Girsang
Office of Industry, Trade, Cooperatives, Small and Medium Business
Head of Industry Development Division
Government Institution
2
Adhitya Pratama Yudhasaput
Office of Industry, Trade, Cooperatives, Small and Medium Business
Head of Small and Medium Enterprise Infrastructure Division
Government Institution
3
Suhono Harso Supangkat
Think20 (T20)
Head of Small and Medium Enterprise Infrastructure Division
Think Tank
4
Sigit Purwanto
Institute for Innovation and Entrepreneurship Development (LPIK-ITB)
Head of Monitoring and Evaluation Division
Think Tank
5
Aufa Doarest
World Bank
Private Sector Specialist
International Organization
6
Timothy Astandu
Populix
CEO
Industry
7
Alam Medina
Governor’s Team for the Acceleration of Development (TGUPP)
Policy Analyst
Government Institution
8
Manael Sudarman
Jakarta Experience Board
Business Director
Government Institution
9
Zidny Ilman
Gojek
Public Policy & Government Relations Jr. Manager
Industry
Priority Area 2: How might we make digitally-empowered growth affordable for MSMEs?
10
Presthysa Nagitha Lestari
Gojek
Vice President, Public Policy and Government Relations
Industry
11
Tauhid Ahmad
INDEF
Executive Director
Think Tank
12
Puji
Bank DKI
SME Division
Financial Institution
13
Teddy Trilaksono
Universitas Prasetya Mulya
Faculty Member
Educational Institution
14
Frida Elizabeth
Office of Industry, Trade, Cooperatives, Small and Medium Business
Head of Creative and Digital Industry Division
Government Institution
15
Emana Fasianti
Office of Industry, Trade, Cooperatives, Small and Medium Business
Head of Creative and Digital Industry Division
Government Institution
Priority Area 3: How might we build the tech talent reservoir to meet the evolving industry demand?
16
Andy Sulasikin
Jakarta Smart City
Government Institution
17
Tendy Gunawan
International Labor Organization
National Program Officer
International Organization
18
Erika Dianasari Go
Alpha JWC
Partner
Financial Institution
19
William Hendradjaja
Skilvul / Impact Byte
Co-founder & Chief of Business
Educational Institution
20
Nursida Yaru
Tokopedia
Senior Public Policy and Government Relations Associate
Industry
Gender Distribution
Total Owners Interviewed:
20
Category Distribution
Total Owners Interviewed:
20
smartchange 2022
Digital Empowerment

Offer MSMEs financial coaching services

Policies Involved

Renovation
Governor of DKI Jakarta Regulation No. 2 of 2020 on Integrated Entrepreneurship Development
Innovation
Ministry of Cooperatives and MSMEs Regulation on MSME Business Training

Challenge

MSMEs often lack the financial resources to adopt new technologies and build their own internal digital infrastructures. Although there are various financing policies and programs available for MSMEs, micro enterprises in particular suffer from higher loan rejection rates due to their higher risk profiles, coupled with limited financial reporting capabilities and lack of understanding of the qualifications and payment terms. Since existing regulations suggest that collateral is not required for MSMEs aiming to access KUR, banks have little way to mitigate the risks they are undertaking1 2.  This explains why, despite high program signup rates, graduates of Jakpreneur and other MSME development programs still find it challenging to obtain financing and grow their business.

Current Policy

The Governor of DKI Jakarta Regulation No. 2 of 2020 on Integrated Entrepreneurship Development facilitates potential entrepreneurs and entrepreneurs who participate in the Jakpreneur program with access to financing. One example of the financing options available for program participants is the People’s Business Credit program (translates to Kredit Usaha Rakyat or KUR). Based on information gleaned from the co-design workshop, partnership with Bank DKI has enabled Jakpreneur to facilitate KUR financing for more than 2400 program participants since 2018. However, the current regulation does not guarantee that all of the 300,000 Jakpreneur program participants will be successful at obtaining a loan or other sources of financing3.

Meanwhile, MSME business training run by organizations such as large businesses, higher education institutions or civil society organizations are not obliged to offer participating MSMEs specialized coaching to assist them in their financing applications. These programs do not use standardized curriculums and are often set up to meet the organizations’ own organizational goals, such as meeting the interests of non-profit donors or for large businesses to fulfill their corporate social responsibility (CSR).

Action

Financial coaching services can help MSMEs to understand and reliably reveal the future prospects of their business digitalization to potential financiers. They may include banks and other financial institutions that provide loans, or government agencies and civil society organizations that offer small business grants. To achieve this, the government needs to offer MSME development programs (including Jakpreneur and business training by various organizations) incentives to provide their participants with specialized coaching for financing applications. Second, the programs need to verify whether the MSMEs have the potential and capacity to go digital. Third, the programs can help MSMEs to understand the different financing options, select ones that are best suited for their situation, and guide them through the application process. Upon acceptance, coaching responsibilities can be shared with or passed on to the lender or financier. Continuous coaching is important so that MSMEs can continue to learn to make sound business decisions and manage the cash in their business with confidence.

action points
parties involved
Incentivize MSME development programs to assist MSMEs with their financing applications
Ministry of Cooperatives and MSMEs
Provincial Government of DKI Jakarta
Office of Industry, Trade, Cooperatives, Small and Medium Business DKI Jakarta
Verify the business potential for going digital
Ministry of Cooperatives and MSMEs
Office of Industry, Trade, Cooperatives, Small and Medium Business DKI Jakarta
MSME development programs 
Access bookkeeping with MSME consent
MSME development programs
MSMEs
Coach and prepare MSMEs for financing applications
MSME development programs
MSMEs
Post-financing acceptance coaching 
MSME development programs
Banks and other financial institutions
MSMEs

Indicator of Success

Number of coached MSMEs
Number of coached MSMEs that successfully obtained financing
Number of coached MSMEs that successfully obtained unsecured loan
MSMEs’ non-performing loan ratio
MSMEs’ loan repayment rate
previous
Improve the infrastructure of MSME financing information  
next
Help MSMEs to access production technology
  1. The Coordinating Ministry of Economic Affairs Regulation No. 1 of 2022 on Guidelines on the Implementation of People’s Business Credit (KUR).
  2. KUR micro product is an unsecured loan product provided for MSME entrepreneurs.
  3. Jakpreneur. https://jakpreneur.jakarta.go.id/index [accessed 17 May 2022]

For many entrepreneurs, the decision to turn into innovations depends on the ease to adopt technology, trained workforces, and multiple sources of finance. Yet, navigating the complex regulation is a major challenge for most lay business people. To expedite the economic recovery post-pandemic recession, the stakeholders in the ecosystem are urged to formulate the right policy to simplify such challenges.

— Kariem El-Ali, Senior Policy Advisor
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