Digitalization and informal MSME: Digital financial inclusion for MSME development in the formal economy
DOI:
https://doi.org/10.15549/jeecar.v10i1.1056Keywords:
digitalization, financial inclusion, micro small and midium enterprises (MSME, innovation, loansAbstract
This study examines digital financial inclusion and uses Fintech for informal micro small and medium enterprises (MSMEs) to overcome the financing gap. The researchers used primarily qualitative methods, namely a qualitative analysis strategy verification through inductive analysis. The results show that Indonesia's fintech landscape makes MSME a driver of the digital economy so that they can overcome the financing gap in the informal sector. The challenges faced by Fintech in encouraging MSME business efficiency in the form of unbalanced agency distribution, data security, data access problems, low digital financial literacy, low connectivity, and interoperability can be overcome by taking advantage of existing opportunities. These opportunities include the role of MFIs and cooperatives in promoting financial inclusion and the development of telecommunications infrastructure networks in Indonesia. The novelty of this research is the comprehensive evaluation of achieved progress in digital financial inclusion for MSMEs in Indonesia and the developed recommendation for regulations by relevant authorities to encourage the business efficiency of MSMEs through facilitating digital financial inclusion.
References
Bain & Company, Google, Temasek. (2019). The Future of Southeast Asia's Digital Financial Services. Bain & Company, Inc., Singapore.
Baranauskas, G., & Raišien?, A. G. (2021). Expert-based evaluation of digitalization and mass customization in the Baltic non-life insurance online platforms. Journal of Eastern European and Central Asian Research, 8(2), 184–201. https://doi.org/10.15549/jeecar.v8i2.644 DOI: https://doi.org/10.15549/jeecar.v8i2.644
Blancher N. (2019). Financial Inclusion of Small and Medium Sized Enterprises in the Middle East and Central Asia. IMF Washington, DC. Retrieved From: https://www.imf.org/~/media/Files/Publications/DP/2019/English/FISFMECAEA.ashx DOI: https://doi.org/10.5089/9781484383124.087
Bosnia, T. (2020). OJK: Cloud Computing Bisa Efisiensikan Fintech dan Pengawasan, CNBC Indonesia, [Online]. Retrieved From: https://www.cnbcindonesia.com/tech/20180516121346-37-15151/ojk-cloud-computing-bisa-efisiensikan-fintech-dan-pengawasan
Capri A. (2019). Micro and Small Businesses in Indonesia's Digital Economy. Retrieved From: https://apfcanada-msme.ca/sites/default/files/2019-03/Micro%20and%20Small%20Businesses%20in%20Indonesia' s%20Digital%20Economy.pdf
DailySocial.id. (2021). The Convergence of (Digital) Financial Services. DS/innovate. Fintech Report.
Dalitso, K., & Peter, Q. (2000). The policy environment for promoting small and medium-sized enterprises in Ghana and Malawi. University of Manchester.
Fintech in ASEAN. (2021). Digital Takes Flight. Uob.co,/fintech2021. Retrieved From: https://www.uobgroup.com/techecosystem/pdf/fintech-in-asean-2021.pdf
Kementerian Koordinator Bidang Perekonomian Republik Indonesia, HM.4.6/103/SET.M.EKON.3/05/2021. UMKM Menjadi Pilar Penting dalam Perekonomian Indonesia, Jakarta 5 Mei 2021. Retrieved from: https://ekon.go.id/publikasi/detail/2969/umkm-menjadi-pilar-penting-dalam-perekonomian-indonesia
PIP Kemenkeu, BLU-Pusat Investasi Pemerintah Kementerian Keuangan RI Ditjen Perbendaharaan. Kredit Usaha Mikro Melesat 94% hingga kuartal I/2022. Retrieved from: https://pip.kemenkeu.go.id/id/data-publikasi/berita-terbaru/139-kredit-usaha-mikro-melesat-94-hingga-kuartal-i-2022.html
Kementerian Investasi, BKPM. Upaya Pemerintah untuk Memajukan UMKM Indonesia. Retrieved from: https://www.bkpm.go.id/id/publikasi/detail/berita/upaya-pemerintah-untuk-memajukan-umkm-indonesia
Kumar R. (2017). Targeted Financing For Sme's And Employment Effects: What Do We Know And What Could Be Done Differently? Jobs Working Paper Issue World Bank Group. 2017 (3). Retrieved From: https://openknowledge.worldbank.org/bitstream/handle/10986/27477/115696-5-6-2017-13-9-8-TargetedSMEFinancingandEmploymentEffects.pdf?sequence=5&isAllowed=y
Kurniati, P. S., & Suryanto, S. (2022). The Role of the Indonesian Government in the Era of Banking Disruption Innovation. Journal of Eastern European and Central Asian Research, 9(1), 93–100. https://doi.org/10.15549/jeecar.v9i1.881 DOI: https://doi.org/10.15549/jeecar.v9i1.881
Le, T. H., Chuc, A. T., Taghizadeh-Hesary, F. (2019). Financial inclusion and its impact on financial efficiency and sustainability: Empirical evidence from Asia. Borsa Istanbul Review, 19(4), 310–322. DOI: https://doi.org/10.1016/j.bir.2019.07.002
McKinsey & Company. (2016). Unlocking Indonesia's Digital Opportunity. Oktober 2016
Mehrotra, M. (2015). Digital Banking for Small and Medium-sized enterprises, Improving access to finance for the underserved. Retrieved from: https://www2.deloitte.com/content/dam/Deloitte/sg/Documents/financial-services/sea-fsi-digital-banking-small-medium-enterprises-noexp.pdf
Moses Lo. (2021). Xendit: e-wallet tumbuh 300 persen. Retrieved from https://mediaindonesia.com/ekonomi/457888/xendit-e-wallet-tumbuh-pesat-hingga-400-persen-akibat-pandemi
Nugroho A., Purwanti, E. Y. (2018). Determinan Inklusi Keuangan Di Indonesia (Global Findex 2014). Jurnal Dinamika Pembangunan, 1(1), 1–13. DOI: https://doi.org/10.14710/jdep.1.1.1-13
OECD (2022), Financing SMEs and Entrepreneurs 2022. An OECD Scoreboard, OECD Publishing, Paris, https://doi.org/10.1787/e9073a0f-en DOI: https://doi.org/10.1787/e9073a0f-en
Otoritas Jasa Keuangan (OJK). (2022). Perusahaan Fintech Lending Berizin. Retrieved From:https://www.ojk.go.id/id/kanal/iknb/financialtechnology/Documents/penyelenggara%20fintech%20lending%20berizin%20per%203%20Januari%2022.pdf
Peraturan Bank Indonesia Nomor 19/12/PBI/2017 Tentang Penyelenggaraan Teknologi Finansial.
Peraturan Bank Indonesia Nomor 23/13/PBI/2021 tentang Rasio Pembiayaan Inklusif Makroprudensial Bagi Bank Umum Konvensional, Bank Umum Syariah, dan Unit Usaha Syariah.
Reza Pahlevi. (2022). Survei : 60,2% UMKM Hanya Memiliki Modal untuk Bertahan Maksimal 3 Bulan. Retrieved from : https://databoks.katadata.co.id/datapublish/2022/01/19/survei-602-umkm-hanya-memiliki-modal-untuk-bertahan-maksimal-3-bulan
Rusdana, N. R., Choirani, S. J., & Friska, A. S. (2022). Digital Marketing Communication Strategy for Micro , Small and Medium Enterprises (MSMEs) in Business Competition. International Journal of Research and Applied Technology, 2(1), 163–168. DOI: https://doi.org/10.34010/injuratech.v2i1.6913
Soegoto, E. S., Amelia, N., Dhafina, N. A., & Berlianti, W. (2021). Utilization of Word-of-Mouth Marketing Strategy in Culinary Business. International Journal of Research and Applied Technology, 1(2), 439–447. https://doi.org/10.34010/injuratech.v1i2.6779 DOI: https://doi.org/10.34010/injuratech.v1i2.6779
Valiyev, A., Rustamov, F. V. oglu, Huseynova, R. A., Orujova, M. S., & Musayev, S. N. (2022). The Digitalization Effectiveness As An Innovative Factor Development Of The Agriculture In Azerbaijan. Journal of Eastern European and Central Asian Research, 9(2), 194–205. DOI: https://doi.org/10.15549/jeecar.v9i2.902
Vika Azkia Dihni (2021). Meningkat 21,68% Pembiayaan Lembaga Keuangan Mikro Capai Rp.749,42 Miliar pada 2020. Retrieved from: https://databoks.katadata.co.id/datapublish/2021/10/08/meningkat-2168-pembiayaan-lembaga-keuangan-mikro-capai-rp-74942-miliar-pada-2020
World Bank Indonesia. (2021). Beyond Unicorns Harnessing Digital Technologies for Inclusion in Indonesia. Flagship Report. The World Bank. 1818 H. Street NW, Washington DC 20433. DOI: https://doi.org/10.1596/978-1-4648-1778-6
Yulfan A N, Melia K, Devi N. (2021). Fintech, Financial Inclusion, and Suistainability: A Quantitative Approach of Muslim SME's. IJIBE (International Journal of Islamic Business Ethics), 6 (1): 54-67. E-ISSN: 2502-0633, P-ISSN: 2502-4647 http://jurnal.unissula.ac.id/index.php/ijibe DOI: https://doi.org/10.30659/ijibe.6.1.54-67
Downloads
Published
How to Cite
Issue
Section
License
The JEECAR journal allows the author(s) to hold the copyright and publishing rights of their own manuscript without restrictions.
This journal applies the Creative Attribution Common License to works we publish, and allows reuse and remixing of its content, in accordance with a CC-BY 4.0 license.
Authors are free to: Share — copy and redistribute the material in any medium or format and Adapt — remix, transform, and build upon the material for any purpose, even commercially.
Under the following terms: Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
No additional restrictions — The author may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
The JEECAR Journal is committed to the editorial principles of all aspects of publication ethics and publication malpractice as assigned by the Committee on Public Ethics.