Various data and expert opinions absolutely acknowledge that MSMEs are an important pillar of the Indonesian economic sector. In fact, MSMEs are also an economic savior, especially when the country is hit by a period of crisis. That's why the Government and other parties are working so hard to ensure that the continuity of Micro, Small and Medium Enterprises (MSMEs) is not disrupted, especially during the economic downturn during the current Corona virus or Covid-19 pandemic.

Sandiaga Salahuddin Uno in his interview with Media Indonesia said that the sector that saved Indonesia during the 1998 monetary crisis really needed to be of common concern. Both the government and the private sector must embrace MSME actors and take steps to save them.

Sandiaga also reminded MSMEs that move from upstream to downstream to prepare plans. Moreover, MSMEs are engaged in the health and food sector. One of them is by actively participating in training that can be carried out to strengthen the business. Digitalization is no exception.

Also read : Why do MSMEs need to be technologically literate?

During the 1998 economic crisis, MSMEs acted as saviors of the national economy, because amidst the collapse of many industries, MSME exports actually increased many-fold with high profits, in line with the high exchange rate of the United States dollar against the rupiah at that time. However, now with Covid-19 in almost all countries, no one can avoid its impact. In fact, the impact of the pandemic on MSMEs is believed to be greater due to the high level of vulnerability and lack of resilience due to limited liquidity, suppliers and options in overhauling business models.

The impact of the Covid-19 pandemic on the economic and business sectors is very deep, because this pandemic has destroyed the most important side of the economy, namely supply and demand. Various sectors also experienced impacts, including Small and Medium Enterprises (MSMEs).

From the supply side, many MSMEs experienced a reduction in activity due to policies limiting social interaction which resulted in the production process stopping. From the demand side, reduced demand for goods and services has resulted in many MSMEs being unable to maximize profits, resulting in reduced company liquidity.

Based on data from the Ministry of Cooperatives and SMEs, as many as 98% of businesses at the micro level or around 63 million were affected by the Covid-19 pandemic. The number will certainly increase as large-scale social restrictions (PSPB) last in a number of areas. In fact, according to records from the Organization for Economic Co-operation and Development (OECD), almost half of MSMEs in Indonesia will go bankrupt by December 2020. Isn't that scary?

What's more, we all know that so far MSMEs have been able to absorb 96 percent of the workforce. With such a large workforce absorption, if the MSME sector is disrupted, it will result in many people losing income. Even now, many employers are unable to pay their workers' wages in full. Many people have even laid off their employment. I had to, because I was out of breath.

Reporting from Okezone.com, Assistant Deputy for Marketing at the Ministry of Cooperatives and SMEs, Destry Anna Sari, revealed that there are five types of MSMEs that have been affected by the COVID-19 pandemic, including businesses providing food and beverage accommodation; wholesale and retail trade such as motor vehicle repair and maintenance; processing industry; and agricultural, forestry and fisheries businesses.

After being affected, these five types of MSMEs must also be prepared to face the possibility of an economic recession. A financial condition that can affect the value of money exchange, capital markets, and the national economy. Indonesia experienced this recession in 1998. In 1998, Indonesia experienced inflation of 88%, a deficit of 13%, and foreign exchange reserves decreased by more than USD 17 billion, the SME sector was still able to run normally.

But the analysis can still be wrong. We can be a little worried, but don't let our spirits dampen. In fact, we have to be smarter and stronger in facing this situation. Because no matter how difficult the situation, believe that opportunities are always there. The saying goes, no captain is born from a calm sea. Likewise in the business world. The more challenges there are, the stronger the entrepreneur becomes.

It was proven in 1998 that MSMEs were one of the businesses that were resistant to the Indonesian economic crisis. This is confirmed by data from the Central Statistics Agency from 1997 to 1998. Why is that?

This started with the opening of job opportunities by small entrepreneurs in 1998 to 64.31 million people. This figure apparently decreased slightly by 1.96% compared to 1997 which reached 65.6 million people. Because of SMEs, a year after the crisis, the workforce absorbed again increased 4.4 percent to 67.16 million people.

The incident happened again in 2008. In that year, Indonesia experienced a global financial crisis triggered by subprime mortgages which occurred for the first time in the United States. In fact, MSMEs have helped lift Indonesia from the economic recession in society. Because, based on BPS data, the number of labor absorption in that year increased 3.9% to 90.49 million people compared to 2007.

It is clear, history has proven that MSMEs have a very big factor in increasing foreign exchange by increasing exports of Indonesian products. This of course makes MSMEs reap high dollar exchange rates. Moreover, MSMEs are engaged in furniture and local raw materials such as marine and agricultural products.

Then is it true that MSMEs are able to survive in times of crisis and can even save (again) the Indonesian economy?

Yes, of course it is! At the start of the pandemic, MSMEs were really hit hard. However, there are just as many things that are growing and developing due to pivoting or shifting. Not to mention, with the emergence of new MSMEs that were born due to the pressure of the situation? These are tough entrepreneurs who will save the economy. How? Are you one of them?

Want to know the reason why MSMEs can save Indonesia from an economic recession? Let's immediately look at several reasons that might make you proud to be an entrepreneur.

1. Loyalty of Local Consumers

When talking about MSMEs, they cannot be separated from loyal consumers. Because MSMEs generally utilize human resources, capital and local raw materials. Production costs are also reduced, resulting in products at relatively cheap prices and still of guaranteed quality.

These two factors make consumers automatically loyal to local MSME products. Not only that, pride in using one's own country's products is also starting to form. So it's not surprising that loyal consumers help increase sales and purchases of MSMEs so that the economy can move stably and opening micro businesses is not so affected by the recession.

2. Focus On Products That Are Needed

Apart from loyal consumers, being able to focus on products that people need is one of the keys that can make MSMEs survive during a recession. In addition, products that are generally affected by the recession are products that have a wide marketing scale and imported products.

Products needed by the community include basic necessities such as food. For these MSMEs, the circulation of money is in fact stable because people's selling power and purchasing power are in balance.

3. Capital Market Changes Do Not Affect MSME

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Are capital market flows rising or falling? No problem! Because, in fact, the movement of MSMEs is not influenced by the capital market. This is one of the benefits that MSMEs can get.

On the other hand, for businesses that are influenced by the capital market, you need to be careful and think again about the strategies you have to implement in order to survive. Re-strategize if the capital market starts to deteriorate, because your purchasing power may tend to decline and even result in employee layoffs.

Those are three things that can enable MSMEs to survive in times of crisis. So how do you keep your business running if the economy is on the verge of recession? Come on, check out the tips, BossQ!

4 Ways to Keep Your Business Surviving in Times of Crisis

Do you know why MSMEs can survive in times of crisis? Well, that's not all, BossQ. You also need to do these four things. All of this can certainly increase your business and even avoid the threat of recession. Want to know what it's like? Come on, check out the two tips below!

1. Digital Technology Support for MSMEs


Businesses connected to digital technology can enable MSMEs to survive the crisis. Especially in primary needs businesses such as resellers of food, drinks, school supplies, and personal health equipment, for example masks or hand sanitizers.

Increasing insight into the ability to master technology and respond quickly to online consumers can certainly enable MSMEs in the digital marketplace to survive. This pandemic period is certainly a good momentum to make your conventional business go digital and market products online.

Apart from increasing your sales with the online marketplace, you can also use the Qasir application too, you know. By using the Qasir application, you can record all digital and cash transactions that occur both online and offline. Not only that, you can also manage products and stock by adding, deleting, editing product variations, and even moving products between outlets. Interested in trying it? Just download the application here.

2. Manage Strategy and Win Customers' Hearts

Is your business still 'on' during this crisis? Wow, really cool! So that your business continues to be flooded with customers, try to manage strategies that can win customers' hearts.

To do this, offer something different to get the attention of new customers. Apart from that, also provide satisfactory service to retain old customers. For example, with a loyalty program or service with a personal approach.

For example, by providing a discount program. Confused about how to do it? Don't worry, there is a Manage Qasir Discount feature. Learn about this feature by reading the article here. To activate the Manage Discount feature, click this link on your Android phone.

3. Reach New Customers Through Old Customers

You can do it? Yup, that's possible. You don't even need to spend promotional costs to find new customers. The method is quite easy, you can use the network to ask for free recommendations.

By having a good relationship with customers, you can certainly get these recommendations for (ahem) free. But as a reward, make sure your old customers get the best service so they feel appreciated.

4. Capital Injection from Government

Especially for this pandemic period, the government together with the Financial Services Authority issued a countercyclical policy or economic stability policy. In this regulation, banks will provide stimulus for debtors affected by COVID-19.

These stimulus policies include:

  1. Assessment of the quality of credit/financing/provision of other funds is only based on the accuracy of principal and/or interest payments for credit up to IDR 10 billion.
  2. Banks can restructure all credit/financing without looking at credit ceiling limits or types of debtors, including MSME debtors. Credit/financing quality is expected to be smooth after restructuring.

This policy certainly aims to stabilize Indonesia's economic value, increase the role of MSMEs, and become a practical solution for entrepreneurs facing business difficulties in the midst of the COVID-19 pandemic.

That's it BossQ, four things that can help your business survive in times of crisis. Of the two things above, which ones have you done? If it turns out to be different, let's share your tips in the Direct Message column, BossQ. Who knows, your tips could also help other MSME friends. Stay enthusiastic and healthy always, BossQ!

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