Strengthen MSME data

Policies Involved

Innovation

Ministry of Cooperatives and MSMEs Regulation on MSME Single Data

Challenge

MSME development in Indonesia has long suffered from fragmented data. Data on MSMEs are often limited, opaque and not exhaustive, partly due to the large proportion of informal enterprises and the use of multiple repositories specific to each institution or agency. The fragmented and opaque nature of MSME data creates a challenge in providing financial institutions with accurate credit information.

Current Policy

MSMEs' Single Database is included as a provision in Government Regulation No. 7 of 2021. GR 7/2021 states that the single database involves collecting and checking the suitability of data, managing the data submitted by ministries/agencies and local governments, and spreading the use of data by taking advantage of the data network system and information. According to the regulation, such a database will at least include the business identity and business owner’s identity¹. While a memorandum of understanding (MoU) has been recently signed to mark the cooperation between the Ministry of Cooperatives and MSMEs and Statistics Indonesia (BPS) in strengthening MSME data, an operational regulation has not been issued, which can pose a challenge for smooth implementation in the field given the number of stakeholders involved and the types of data that need to be collected in order to understand the digitalization financing needs of MSMEs².

Action

Inventorizing data on MSMEs can help the government and other stakeholders to customize policy, product, and service solutions that meet their specific needs. As the ministry responsible for MSME development at the national level, the Ministry of Cooperatives and MSMEs is responsible for leading the process of building the database. To ensure that MSMEs will receive targeted support to digitize their business, the database needs to include not only the identity of the business and its owner, but also the business activity, financing history and needs, as well as their digitalization needs. These may include the perceived costs needed to employ specialized IT staff or to overhaul their existing processes and systems. Regional governments, such as the Provincial Government of DKI Jakarta, should be involved in regularly gathering the most up-to-date data from MSMEs in their region alongside Statistics Indonesia. Finally, it is crucial to digitize the database to ensure that relevant organizations are able to access the data simultaneously.

action points

parties involved

Build the database

Ministry of Cooperatives and MSMEs

Regional governments

Statistics Indonesia (BPS)

Gather data on business activity, financing history and needs

Banks and other financial institutions

Financial Services Authority (BI Checking & SLIK)

Statistics Indonesia (BPS)

Gather data on digitalization needs

Ministry of Communication and Informatics

Regional governments

Statistics Indonesia (BPS)

Digitize the database

Ministry of Communication and Informatics

Statistics Indonesia (BPS)

Indicator of Success

Number of organizations with access to data

Data accessibility

Data validity

Data completeness

Issue operational regulations to facilitate MSME financing

GR 7/2021, Articles 55-59.
KemenKopUKM Teken Kerja Sama Dengan BPS, Perkuat Basis Data Tunggal Koperasi dan UMKM. https://kemenkopukm.go.id/read/kemenkopukm-teken-kerja-sama-dengan-bps-perkuat-basis-data-tunggal-koperasi-dan-umkm

Quantitative Demographics

Gender Distribution

Highest Education Attainment

Owner's Age

Marital status

Number of Dependent(s)

Qualitative Demographics

Education

Gender

SEC

Industry

Size

Age

Codesign Demographics

Gender Distribution

Category Distribution

Strengthen MSME data

Policies Involved

Challenge

Current Policy

Action

Indicator of Success

Issue operational regulations to facilitate MSME financing

Improve the infrastructure of MSME financing information