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Methodologically, this study adopted descriptive analysis, using secondary data on MSMEs in Indonesia. Fourth, is the growth of particularly MSEs a sign of increased entrepreneurial spirit or a reflection of poverty? First, how important are MSMEs in Indonesia? Second, what are their main constraints? Third, how important are these enterprises for the creation of business opportunities for women?. More specifically, this study aims to answer the following four research questions. The measures include the issuance of a number of regulations in the past two decades especially to facilitate MSMEs in the marketing and procurement of raw materials, and in funding by launching a public non-collateral credit guarantee scheme, well-known as Kredit Usaha Rakyat in 2007 (Tambunan, 2018).īased on this background, the main objective of this study is to examine the development of MSMEs in Indonesia with the emphasis on the following three issues: (1) the role of MSMEs (2) their main constraints and (3) the importance of these enterprises, especially micro and small enterprises (MSEs), for the creation of business opportunities for women. Recognizing the importance of MSMEs and constraints they face as discussed above, the Indonesian government has taken many measures to support them.
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However, their development is hampered by a number of constraints, and most significant being the lack of access to bank loans and difficulties in marketing (Orlando & Pollack, 2000 Midgley, 2008 Tambunan, 2009a, b Yuhua, 2013 Das & Mohiuddin, 2015 Oyelana & Adu, 2015 Shah & Saurabh, 2015 Santos & Moustafa 2016 Thapa, 2016 Raghuvanshi, Agrawal & Ghosh, 2017). It is widely stated in the literature that micro, small and medium enterprises (MSMEs) in developing countries are important socially and economically for a number of reasons, which include: (i) their wide dispersion across rural areas and therefore they are very important for rural economic development (ii) their ability to absorb a significant large number of workers (iii) their role as a place for entrepreneurship and business skill development, especially in rural areas and (iv) as a source of business opportunities for women. Secondary data used does not have information about the main/initial motivation of MSME owners to run their own business and their socio-economic profiles. This study has, however, several limitations, especially with respect to the third and fourth research questions. In addition, all gender discrimination treatments that have been burdensome for women to run own businesses must be eliminated. This study ends with some policy recommendations that the government should: (i) conduct trainings that focus on online marketing, entrepreneurship, management, and improving the quality of product and business efficiency (ii) provide alternative funding facilities with low interest rates and non-burdensome requirements and (iii) provide assistance directly in the production site for new entrepreneurs in their first years of running businesses. Poverty seems to be the main force behind the growth of MSEs. About 42.84% of MSEs are owned by women, although the ratio of female to male entrepreneurs in MSEs varies by province. It shows that MSMEs in Indonesia are dominated by MSEs, and accounted for almost 100% of all existing firms but only contributed between 58 to 61% of gross domestic product (GDP).
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First, how important are MSMEs in Indonesia? Second, what are their main constraints? Third, how important are they, especially micro and small enterprises (MSEs), for the creation of business opportunities for women? Fourth, is the growth of MSEs a sign of increased entrepreneurial spirit or a reflection of poverty? This study adopted descriptive analysis using secondary data.
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More specifically, the study aims to answer the following research questions. It has three research issues, namely the role of MSMEs, their constraints, and the importance of MSMEs for the creation of business opportunities for women. This paper examines the development of micro, small and medium enterprises (MSMEs) in Indonesia.