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Lack of financial knowledge impedes creative industry growth
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Creative industry – An artisan makes a wooden mask, part of a costume for a Javanese traditional dance performance. Many creative industry business players overlook the importance of proper financial management to grow their businesses, according to experts. (Tempo/-)
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lack of financial knowledge has hampered the development of small and medium enterprises (SME) in the creative economy sector, in which many business players overlook the importance of proper financial management to grow their businesses, experts have said.
"In many cases, they don't know how to make a financial statement. They even don't know whether or not they're making a profit, and if so, by how much," founder and CEO of financial consultancy Quantum Magna (QM) Financial Ligwina Hananto said on Tuesday. She was speaking at a workshop for capacity building in sharia financing investment and management for creative SMEs held by the Creative Economy Agency (Bekraf).
Ligwina said basic financial knowledge was crucial to growing a business. She observed a tendency of mixing business funds and personal expenses as concerning.
The expert further highlighted her concern over a lack of focus to grow companies among Indonesian business players, although business was in fact detrimental to the development of the creative industry itself.
"Many of these businesses are only seen as a side activity, so the owners are not personally driven to expand them," Ligwina added.
Bekraf official Fadjar Hutomo said capacity building could address business stagnation, pushing companies to be more competitive.
"Creative businesses are the backbone of the creative industry and therefore should be expanded," Fadjar said, adding that the workshop was part of the government's efforts to boost the creative industry.
He further said that accountable financial management could trigger an increase in potential capital from external parties such as investors and micro credit program (KUR) loans.
Fadjar, who is the investment access field deputy at Bekraf, also spoke of the merits of sharia financing to grow businesses.
Sharia financing expert Mohammad B. Teguh said SMEs should not hesitate to implement sharia principles in their business practices as it could be beneficial to financial management.
Hanna Faridl, creative director of online Muslim fashion store hijup.com, said she practiced sharia financing in her business because it suited the company's mission.
“In sharia principles, all parties must benefit and no one should feel they lose," she said.
Since its launch five years ago, Hanna said, her company had acquired 279 Jakarta-based tenants, which exported their products worldwide.
According to existing regulations, the government has categorized 16 subsectors under the creative economy for KUR. They comprise cuisine, crafts, fashion, application and game development, architecture, interior design, visual communications design, product design, animation film and video, photography, music, publishing, advertising, performing arts, television and radio. (ebf)
