MSMEs turned to digitalization to survive COVID-19: Indef

MSMEs turned to digitalization to survive COVID-19: Indef

Based on data from the Cooperatives and SMEs Ministry, around 15.3 million Indonesian MSMEs have gone digital so far. (ANTARA/HO-Pixabay/FR)

Jakarta (ANTARA) - Digitalization was one of the options that micro, small, and medium enterprises (MSMEs) chose to survive amid COVID-19, executive director of the Institute for Development of Economics and Finance (Indef), Tauhid Ahmad, has said.

According to a World Bank survey, MSMEs made a number of adjustments in response to COVID-19: digitalization, spending additional capital, and releasing new products, Ahmad highlighted during an online discussion observed from here on Thursday.

The adjustments were also mirrored in the MSMEs Go Digital achievement which, as it turns out, has exceeded the target set by the government, he pointed out.

"Of the targeted 13 million MSMEs, as of yesterday, based on data from the Cooperatives and SMEs Ministry, there are around 15.3 million MSMEs who have gone digital," Ahmad affirmed.

Related news: Ministry encourages Indonesian MSMEs to join digital ecosystem

Along with the economic recovery during the second year of the pandemic, the MSME sector is also undergoing significant recovery, he said.

In 2020, around 48 percent of MSMEs were forced to close down due to COVID-19, but in 2021, the number of MSMEs that had to close shop fell to just 5 percent, he pointed out.

In addition, MSMEs' financial condition in 2020 was poor since they did not have reserve funds, but their condition has improved in 2021, Ahmad noted.

The development of e-commerce transactions has accompanied this financial recovery, he said. He said he suspects that this has also been the reason behind the reduction in MSMEs shutting shop alongside the creation of new businesses.

"BI (Bank Indonesia) has also projected that there will be an increase in e-commerce transactions up to Rp395 trillion in 2021," Ahmad added. (

Related news: Govt to help 32 mln MSMEs enter digital market by 2024

 

Comments