TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Small businesses improve, but demand, access to capital left wanting
Micro, small and medium enterprises in Indonesia have seen improvements a year into the coronavirus pandemic, but many still struggle to find buyers and working capital, the Asian Development Bank (ADB) says.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Workers remove the fine hair on cowhide by burning it off at a workshop in Depok, West Java, in February. Home industries have suffered a hit due to the pandemic, but many still manage to keep going. (JP/P.J.Leo)
M
any micro, small and medium enterprises (MSME) were seeing improvements one year after the coronavirus plunged the country into a deep financial crisis, but many are still struggling with a sharp drop in demand, and a prolonged pandemic would delay their recovery.
In the March-to-April period, the share of MSMEs that were temporarily closed was between 1.8 and 6.3 percent across all size categories, down sharply from up to 54.4 percent a year earlier, according to an Asian Development Bank (ADB) survey of 2,509 MSMEs nationwide.
But the share of MSMEs reporting a drop in demand surged to more than 60 percent in that period from between 27.9 percent and 43.8 percent in the March-April period last year, depending on the firms’ sizes.
“Throughout the year [following the start of pandemic response measures in Indonesia], MSMEs have continued to face a sharp drop in demand and revenue,” ADB senior economist Shigehiro Shionzaki said during a virtual presentation of the survey findings on Thursday.
“The Indonesian economy would gradually shift to the recovery stage toward the end of 2021, but it is accompanied by downside risks [to] the economy caused by the prolonged pandemic.”
MSMEs, especially those relying on in-person transactions, have been hit hard by the COVID-19 mobility restrictions, which the government recently tightened and extended to late August in a bid to limit the spread of the virus.
Read also: BI holds policy rate at 3.5%, prepares MSME financing boost
