Social Capital Analysis in Small and Micro Enterprises (SMEs) Management during the Covid-19 Pandemic

Small and Micro Enterprises (SMEs) in Indonesia play an important role as a vital source of employment, contribute significantly to of the country’s Gross Domestic Product (GDP ) and a crucial source of economic security for the lower middle class. However, during Covid-19 pandemic, SMEs have faced serious challenges that have had adverse impact on business operations. Government policies that were aimed at controlling the spread of Covid-19, that included Large-scale Social Restrictions (PSBB) policy and social distancing rules, have had adverse impact on SME economic activities. This study analyzes social capital in the management of SMEs in Bengkulu city. The research was based on primary data and secondary data sources. Meanwhile, data analysis involved frequency distribution statistics. The empirical results showed that social capital in the management of SMEs as manifested in mutual trust, business networks, and solidarity had positive impact on SMEs management in Bengkulu city.


INTRODUCTION
Small and Micro Enterprises (SMEs) play a vital role in national economic growth. Previous research including (Situmorang, 2015;Tambunan, 2012;Tedjasuksmana, 2014) have established that SMEs have played an important role in Indonesia's economic growth. Thus, SME constitute a driving force of Indonesia's economic growth and development. In Bengkulu Province, SME growth of is an important source of the economic growth for the province. The province has registered economic growth of 5 percent on average over the last five years. The province, however, posted an economic slowdown during 2013-2015 period, but rebounded in 2016. In 2017 economic contraction occurred when the province registered economic growth of 4.98 percent (Kanwil DITJEN Perbendaharaan Provinsi Bengkulu, 2018). The slowdown in growth, was a result of declining value of commodities in Agriculture, Forestry and Fisheries. However, the growth of Micro and Smallscale Enterprises (SMEs) and small-scale businesses still contributed 87.85 percent and 11.19 percent, respectively. On the contrary, medium and large-scale businesses contribution to provincial economic growth was less than 1 percent (Anonim, 2018).
Of the 9 districts/cities in Bengkulu province, Bengkulu city contributes most to economic growth. Bengkulu City contributed 14.55 trillion to Gross Regional Domestic Product (GRDP) (BPS Provinsi Bengkulu, 2018). The main source of economic growth in the Bengkulu city is in SME sector. However, SME growth has shown slight fluctuations due to various problems. Most SMEs operating without business licenses and are generally unsustainable. Based on a previous research (Rosyadi, Slamet, et all, 2020) some of the problems SMEs face 1) low motivation among the business actors; 2) difficulty in finding financing facilities; 3) lack of marketing innovations; 4) preponderance of traditional business management practices in most SMEs; 5) lack of computerization and use of internet of business operations in most business actors ; 6) most business actors do not have a strategic business plans ;and 7) unreadiness of business actors to face the challenges of the external envi-ronment, including capital, licensing, planning and others. In another study, SMEs face constraints in their operations arising from limited capabilities of Human Resources (HR) capacity, which hampers the effectiveness and efficiency of their operations (Darmi & Agussalim, 2017). Meanwhile, poor or lack of planning, is also considered one of the obstacles SMEs face (Darmi, Mujtahid, & Udin, 2020).
During the COVID-19 pandemic, the performance of SMEs declined drastically (Nugroho, 2020). Thus, unlike was the case during past economic crises when slowdown in economic activity of medium and large enterprises became an opportunity for SMEs, COVID-19 pandemic created obstacles that were inimical to operations and performance of many SMEs.
Social capital is a social resource that can be an investment opportunity if it is managed optimally. Social capital offer abundant opportunities for SMEs if it is exploited well. This is more so in communal societies where interaction and mutual assistance are core society values. Interaction over time generates trust, which is an essential building block for solidarity. Long term relationships, trust, and mutual dependence create business opportunities for SMEs in good and bad times.
Previous studies show evidence of the benefits of social capital in an organization as a result of the increase in member participation in organizational affairs. In the case of village administrations, village fund can enhance social capital in village communities by supporting and empowering women participation in village development efforts (Darmi, 2016). Social capital is, for instance, an important element in the development of rural infrastructure (Kusumastuti, 2015). One fitting example, is the Muhammadiyah women's organization movement, in Baubau city, where the Aisyiyah organization social capital, plays crucial role the City's development efforts (Wijaya & Salam, 2019). One of the manifestations of social capital is the adoption of cooperative principles and values in organizational the management of organizations. One such value is mutual trust (Sinuraya, 2012).
According to Fukuyama, social capital entail values formed out of norms of organizational members in their day to day interaction with one another in the process of achieving achieve a common goal (Francis Fukuyama, 2000). In the context of the management of SMEs, social capital translates into an interaction among SME managers to achieve mutually beneficial goals. In another study, Fukuyama (2001) found that noneconomic factors, including social capital, account for only 20 percent of economic growth, without the such factors economic factors find it difficult to make their contribution to economic growth as well (80 percent).
Social capital can enhance competitiveness (Darmi, 2016;Fatimah, 2013). This is through the translation of social capital of traders into positive energy (shared social capital) to resolve obstacles that hamper competitiveness in traditional markets. However, social capital can be effective if it contributes to strengthening trust, reciprocity and core relationships within a community (Widayani, 2013).
Social capital in the management of SMEs is not an individual but collective endeavor as it involves the formation of a network of relationships, strengthening emotional bonds among individuals and groups and exchanging and rendering mutual support. Several studies show that strengthening social capital during Covid-19 pandemic contributes to making improvement in SME performance (Hao, Xiao, & Chon, 2020;Pitas & Ehmer, 2020;Shafi, Liu, & Ren, 2020;Yunus, Zainal, Jalil, & Sari, 2020); fosters the growth of new business networks, clus-ters, that are underpinned by social capital principles, and norms and values. The formation of business network clusters in turn enhances trust and competitiveness of SMEs.
Strengthening social capital can strengthen resilience against disasters. Survival depends on the ability to adapt to changing conditions (Anastasia Petrou, 2013). Social capital has been associated with economic performance of enterprises. (Joe Wallis and Paul Killerby, 2004;Lockhart, 2005;Nixon Kamukama, 2013;Yunus et al., 2020). The advent of the Covid-19 pandemic disaster, elicits the need for society to adapt behavior to changing social and economic conditions. The imposition of large-scale social restriction (PSBB) and social distancing policies, compelled changes in social and cultural patterns of human activity. One of the consequence of the changes in social and economic conditions arising from imposition of restrictions on economic and social activities and movements has been limits on conducting meetings between business networks or bazaars. The effect of restrictions has been adverse to SMEs as demonstrated by the drastic decline in demand for products and services. One good example was Besurek Batik craftsmen who experienced a 90 percent drop in demand for their products in three months, leading to said drastic decline in sales, and subsequent laying off of workers.
The implementation of PSBB has an impact on the erosion of social capital among business actors. In relation to the management of SMEs, SMEs felt lack of interaction between fellow business actors. There are no meetings between communities, no more sharing activities. The absence of meetings and activities (bazaars) for these business actors is due to government policies to reduce the spread of Covid-19.

Darmi, Nuryakin & Mujtahid -Social Capital Analysis in Small and Micro Enterprises (SMEs)….
The impact of the COVID-19 pandemic has spread to all lines of economic, social and cultural life, especially in health. Research in China, the first country to announce that its people were infected with COVID-19, explained that the impact of COVID-19 was felt from an economic and health perspective (Ma et al., 2020;Qian & Fan, 2020;van der Tas et al., 2020). In other parts of the world it is also feel the impact from the economic, socio-cultural and health sessions related to the impact of the COVID-19 disaster (Bai, Quayson, & Sarkis, 2021;Guiroy et al., 2021;Krouse, 2020;Louie et al., 2020;Sha, Liu, & Ren, 2020;Yezli & Khan, 2020). This means that the COVID-19 pandemic is destroying the joints of state life in all countries in the world, including Indonesia.
Developments and changes in society that are attribute to advances in technology coupled with of the ramifications of the COVID-19 pandemic, have led to social changes in Bengkulu City communities. Such changes, have inevitably impacted social values. One of the changes SMEs perceive has been a decline in interaction and cooperation among SMEs. And other SMEs no longer attend joint meetings and sharing of information about activities in their communities. This came as a consequence of the imposition of limits on meetings and activities (bazaars) for business actors by Bengkulu city government in its attempt to control the spread of Covid-19 disease. To minimize the impact of Covid-19 on the economic line, it is necessary to take measures to increase resilience and strengthening SME Business actors. Against that backdrop, this research assesses the contribution of social capital to SME management during the COVID-19 pandemic in Bengkulu city.

METHOD
This research was conducted in Bengkulu city. The research used a mixed methods approach, implying that it collected and analyzed primary and secondary data. Primary data was collected using interviews and field observations, while collecting secondary data involved accessing official publication and reports, legislation and statistics. The study involved 285 respondents who were draw from SME actors in members of comprised Bengkulu city. Meanwhile, in-depth interviews were conducted with 6 (six) business actors that included 2 (two) people from the food product processing cluster, 2 (two) people from the beverage manufacturing cluster; and 2 (two) people were drawn from the Besurek batik craftsmen cluster. Respondents were selected based on purposive sampling and snowball techniques involving SME practitioners.
Data triangulation was used to strengthen data validity ,and involved obtaining data from institutions that provide guidance and assistance for SMEs that included the Center for Integrated Business Services for Micro, Small and Medium Enterprises Cooperatives (PLUT-KUMKM) Bengkulu Province. The assessment criteria and the presentation interval of each answer to the questions used in this study are presented in Table 1. Meanwhile, to determine the most dominant indicator of social capital in the management of SMEs entailed summing up all the answers to questions/statements assessed by respond-JKAP (Jurnal Kebijakan dan Administrasi Publik) Vol.26 (1), May 2022 ----https://journal.ugm.ac.id/jkap  Source: Data Analysis ents from each indicator of the variables studied with the following formula: By using the formula above, the highest percentage of each question from the social capital indicator was determined as the most prominent or dominant statement. Table 2 shows information about 2 (two) types of SMEs in Bengkulu City, including 1) services delivery (eight SMEs); 2) product production (two hundred and seventy-seven SMEs). SMEs involved in producing products include those that convert raw materials into final products that are sold to consumers SMEs that deal in converting raw materials into final products need creative environment that enables them to create innovative products for their target markets. Table 3 shows the status of respondents in business management, providers of information as managers/employees (3 respondents), owners (21 respondents), owners who are business managers as well (261 respondents). This data also confirmed that the most SMEs are characterized by ownermanager arrangement. Table 4 shows that the number of respondents was 285 (two hundred and eighty five comprising 72 (seventy two) males and 213 (two hundred thirteen) females. Thus, the majority of respondents who participated in the survey were females. Women entrepreneurs have been found to be more innovative, and tend to show a proactive attitude toward business development that their male counterparts (Wicaksono & Nuvriasari, 2012). Based on findings of the author, women entrepreneurs in the survey were found to have supply chain strategy, which corroborates previous research results on women entrepreneurship prowess .
Meanwhile, as regards education attainment, two respondents (0.7%) were Master's holders education level (S2) the majority of respondents (204 respondents or 71.6%) had high school educational attainment or its equivalent; 29 (10.2%) respondents had Bachelor education; 22 (7.7%) had junior high school education; while 18 (6.3%), have diploma education as the highest educational attainment. Meanwhile, 10 respondents (3.5%) have elementary school education level (SD) was still of the total respondents).
Meanwhile as respect to economic field or background of respondents, Table 7 showed that 77 out of 285 (27%) were entrepreneurs, while 208 (73%) had no business background/not entrepreneurs. This implies that the sample of respondents was dominated by non-entrepreneurs.

Presentation of survey results
To reiterate the objective of this research, which is to determine the extent to which social capital contributes to the man-

Darmi, Nuryakin & Mujtahid -Social Capital Analysis in Small and Micro Enterprises (SMEs)….
Source: Data Analysis agement of SMEs. Based on theoretical and previous empirical research, social capital is supposed to foster mutual trust between managers of SMEs and employees, which strengthens sense of community and bolsters networks of mutually beneficial relationships in managing SMEs. Results of respondent's answers to interview questions are presented in Table 8.

Respondents answers to question No.1, which states that statement 'I have an open relationship with my business relations'
showed that of the 29 (10.18%), provided the answer of 'very good'; 182 (63.86%) provided the answer of 'good'; 69 respondents (24.56%) provided the answer 'medium' (and no respondents (0%) provided the answer 'very less' Thus, overall the majority of respondents (63.86%) of respondents provided the answer of 'good'. Meanwhile, for question number No 2 (two) which stated that 'I have a familial relationship with my business relationship', 40 respondents (4.04%) provided the answer of 'very well'; 168 respondents answered 'good' (58.95%); 72 respondents (25.26%) provided the answer 'medium'; 5 respondents (1.754%), provided the answer 'less'; and no respondent provided the answer 'very less'. To that end, overall the majority of respondents (58.95%) provided an answer of 'good' to question No.2.
Responses to question No.3 (three) which stated that 'I have a familial relationship with my business relationship', 40 respondents (14.04%) provided an answer of 'very well'; 168 respondents (58.95%) provided an answer of 'good'; 72 respondents (25.26%) gave the answer 'medium'; 4 respondents (1.754%) gave the answer 'less'; and no respondents gave the 'very less' answer Thus, the majority of respondents (58.95%) gave an answer of 'good' to ques-tion No.3.
As regards responses to question No.4 with the statement that says 'I share knowledge with my business relations', 47 respondents (16.49%), gave the answer 'very well' 128 respondents (71.58%) provided the answer 'good', 28 respondents (9.825%) gave the answer 'medium' and there were no respondents who gave both the 'no' and 'less' answer to the statement. Thus, the majority of respondents (128 respondents or 71.58 %) gave the answer 'good' to question No.4.
Overall, 646 answers (66.41%) fell into the 'good' category, followed by 156 answers very good' (13.42%). Meanwhile, 241 times, which represented 18.51% of the answers, were in the 'medium' category while only 1.75 percent of all answers were in the less category. The implication is that SME actors implicitly recognize the importance of social capital values in the management of SMEs.
To determine the contribution of social capital in the management of SMEs in Bengkulu City answers to each statement were summed up. The answer that had the largest number of respondents became the dominant or most important one. A comparison of total score of answers for 4 (four) items was 4,127. To that end, with total score of all items being 5,700 (obtained by of the formula 5 × 285 × 4), implies that the ration between the highest item score to the total item score was = 4.127 : 5.700 = 0.7240 or 0.7240 × 100% = 72.40%. Based on the assessment criteria, it can be inferred that the value of social capital in the management of SMEs in Bengkulu City was 72.40%. The value falls in the range in 68-83 band, which falls under the 'good' category. Based on field results, therefore, respondents perceived social capital in the SMEs management requires exploring all potential networking opportunities, including B2B relations. Based on study results, however, it became evident that while many SMEs in Bengkulu City had forged harmonious relationships with other business actors, some did not exploit or make full use of the opportunity. One example was the Besurek batik businessman, who contended that the adverse impact of decline in demand during the COVID-19 pandemic was as a consequence of a reduction in interaction between among business actors. This is in line with studies that associate a decline in social capital with reduced business growth opportunities (Azhari & Mawardi, 2018).
The COVID-19 disaster led to a the imposition of Large-Scale Social Restrictions (PSBB) and social distancing rules that had adverse impact on the relationships among business actors on one hand, and between businessmen and buyers on the other. Government policy that was tailored toward controlling Covid-19 had adverse effects on activities and operations of SMEs. One of the effects was the inability of business actors to exhibit their products in spaces where customers could have easier access to them.
Previous research shows that product exhibitions are a vital resource that SMEs use to build and expand their social networks, which in turn contribute to improving their performance. Excerpts of an interview of 2 informants underscores such im-portance: "When the COVID-19 pandemic hit, our batik business activities experienced a setback. This was especially as a result of a decline in public demand which almost dropped to zero, employees who used to order batik disappeared, and planned exhibitions were cancelled. We sell batik products through Facebook and the community. In a community consisting of various clusters or types of businesses, we create an association that shares information among members as well as with other groups. Such relations have helped to strengthen business networking, supporting the existence of our businesses to this day" (Sn, 35 years old, batik business cluster Besurik). "Alhamdulillah, the business of making ginger and kalamansi orange drinks has been able to survive the throes of the covid pandemic. We built relationships between various MSMEs, exchanged products, which enabled us to sell various products, as well as have access to other friends who were willing to market our products. We also maintain our commitment to each other" (Yn, 52 years old, beverage business cluster).
During exhibitions, SME actors have the opportunity to share knowledge with business relations. Research results indicated that 71.58 % of SMES actors in Bengkulu City acknowledge having ever shared knowledge with business colleagues. To that end, social capital plays an important role in the management of SMEs. The finding cor-

Darmi, Nuryakin & Mujtahid -Social Capital Analysis in Small and Micro Enterprises (SMEs)….
Source: Data Analysis roborates previous study finding that found a positive association between interaction and relationships among SMEs actors and performance in Taiwan (Liu, 2017). Besides, as demonstrated in Table 8, relationships among SMEs actors are underpinned by and foster stronger mutual trust. The SME actors in Bengkulu City showed strong trust especially in exchanging information. This is evident in the case of Bae Tat Culinary Small Enterprises (SMEs). Bae Tat (Bengali typical food) shares information with other partners in the event customers want to buy food while stall operators are away. The practice demonstrates that there is strong mutual trust among SMEs, which motivates those with information to share it with those that need it even though they unable to derive direct benefits from such a practice. One of the principles of social trust is reciprocity. Those who share information with others do so because they know that sometime in future those they help to inform will do the same when and if conditions permit in future. Building mutual trust in others take time and involves identifying, assessing, reading track records, and asking others for references. Once it is believed that the person has honesty and commitment, trust will grows. Mutual trust underpins the carrying out various activities, especially in the economic sector. This is in line with previous research on sources of enterprise capital and value (Duhamel, Gutiérrez-Martínez, Picazo-Vela, & Luna-Reyes, 2014;Smith, 2010;Wang, Mühlbacher, Wittmann, & Perrett, 2020;Xiao, Zhang, Kong, Li, & Yang, 2020).
As regards the importance of establishing family relationships with business relations to their businesses, 58.95% of respondents provided the answer 'good' or 'agree', while 14.04%. Gave the answer 'very well' such finding showed that business actors harnessed relationships that were underpinned by family-based social networks, regardless of business activities. Data also showed that business actors also established family-based relationships with their employees; and maintain and establish family relationships with business actors, both from the same business cluster and from business clusters not from the same business cluster. Besides, business actors also showed strong inclination to establish good relationships with the authorities, namely the government, as mandated by the SMEs Service Center (PLUT-KUMKM) Bengkulu Province. Family-based relationships are harnessed by forming small groups through holding social gatherings and recitatievents. Self-help and community solidarity events occurs after a disaster or during holding a ceremony such as marrying off sons or daughters, thanksgiving, children's aqiqah and so on, are also used to forge and strengthen family relationships Government officials serve as PLUT facilitators, which contributes to improving SME performance. Research results showed that relationships between SMEs and government officials incentivized activities of business actors by facilitating and providing supportive infrastructure and facility net-JKAP (Jurnal Kebijakan dan Administrasi Publik) Vol.26 (1), May 2022 ----https://journal.ugm.ac.id/jkap  Business networks are very important partner for the development of SMEs as an effort to improve business performance, network member will provide knowledge and share their experiences (Xie, X., Wu, Y., Palacios-Marqués, D., & Ribeiro-Navarrete, S. 2022). In organizational governance, networking is part of social capital that can improve organizational performance (Mc Dougall & Ram Banjade, 2015). Based on interviews, we summarize that the implementation of the PSBB and social distancing policies have an impact on the decline of social capital owned by business actors, this is actually caused by the limitation of access and relationship among networks. The existence of real social capital is one of the main elements in building networks, togetherness, mutual trust and mutual benefit. SMEs actor in Bengkulu , thanks to existing business networks, have been able to mitigate the adverse impact of COVID-19 pandemic induced restrictions in Bengkulu city in a number of ways.

CONCLUSION
Small and micro enterprises (SMEs) play an important role in Indonesia's economic growth and development. Nonetheless, COVID-19 pandemic has had disastrous effects on the economy especially SMEs. Pandemic induced restrictions have led to changes in business behavior of SMEs. Social capital has in various ways mitigated the adverse impact of social restrictions on people movements and economic activities. This has included changing from in-person to online interaction among business actors on one hand and between producers/sellers and customers, on the other. Social media has played a crucial role in the change from pre covid-19 to covid-19 pandemic operations, which underscores the importance of existing business networks.

ACKNOWLEDGEMENT
This article is a small part of a research entitled "Strategies for Strengthening the Management Capacity of Micro, Small and Medium Enterprises to Improve the Family Economy of Business Actors" sponsored by the DRPM of the Ministry of Research and Technology with the Applied Research scheme. Therefore, the authors would like to thank DRPM Kemenristekbrin, which has provided support. The authors also thank the Bengkulu Province KUMKM Service, represented by the Integrated Business Service Center (PLUT) and the SMEs who have provided information.