What Do Banks, Rural Credit Institutions, and Regulators Infer from the Current Strengths and Standing of Indonesian SMEs?

Jenri  Panjaitan; Muhadjir  Darwin; Indra  Bastian; Sukamdi  Sukamdi

Jenri Panjaitan Kementerian Koordinator Bidang Perekonomian
Muhadjir Darwin Universitas Gadjah Mada
Indra Bastian Universitas Gadjah Mada https://orcid.org/0000-0003-4658-8690
Sukamdi Sukamdi Universitas Gadjah Mada https://orcid.org/0000-0002-7581-7950

Keywords: SMEs, social networks, social cognition, organizational readiness for change, strengths, standing, empowerment strategy, governmental policy

Abstract

This study investigates whether the Indonesian regulators control Indonesian small and medium-sized enterprises (SMEs) with matching or mismatching empowerment strategies, in light of their strengths and current standing. Indonesian SMEs contributed approximately 60.34% to Indonesia’s gross domestic product (GDP) in 2018. In addition, Indonesian regulators have focused on financial support through credit policies and tax incentives. Indonesian SMEs have been standing on organizational readiness and readiness for change, based on their social networks and social cognition. It collected thirteen informants with different expertise and experiences. This study’s results suggest Indonesia’s regulatory body and financial institutions should consider the SMEs’ social cognition and organizational readiness for change. According to the current situation, to empower Indonesian SMEs, we recommend strategies such as achieving knowledge supremacy, creating an economic development board, as in Singapore, formulating comprehensive industry-wide policies, adopting omnibus laws, and implementing a shifting balance strategy. In other words, the Indonesian regulators should implement major reforms, which are similar to glasnost and perestroika in the former Soviet Union. This is to enhance Indonesian SMEs and achieve the goal of the Government of Indonesia (GoI) with respect to the optimal distinctiveness of Indonesia’s future economy. This optimal distinctiveness refers to the GoI’s policies, which focused on knowledge supremacy, an industry-wide regime, and research for empowerment.

Author Biographies

Jenri Panjaitan, Kementerian Koordinator Bidang Perekonomian

Panjaitan, Jenri is student at Gadjah Mada University He earned his Doctorandus 1988 in International relations from Catholic University of Parahyangan Bandung, and his Master of Law 2014 in Law from Gadjah Mada University

Muhadjir Darwin, Universitas Gadjah Mada

Darwin, Muhadjir is head of the Masters and Doctoral Studies program in Policy Studies at Gadjah Mada University. He earned his Doctorandus (1977) in State Administration from Gadjah Mada University, His Master of Public Administration (1986) in Population Policy and Management from University of Shoutern California and his Doctor of Philosophy (1990) in Policy Analysis and Development Administration from University of Shoutern California.

Indra Bastian, Universitas Gadjah Mada

Bastian Indra is Lecturer of Accounting in Economic and Business Faculty at Gajah Mada University. He earned his undergraduate (1990) in Accounting at Gadjah Mada University, his Master (1993) in Business Administration at Murray State University USA and his Doctor in Accounting (1999) at The University of Hull United Kingdom. His research interest is Public Sector Accounting and his Professor at Gadjah Mada University. He is one of the founders of the IAI KASP (Indonesian Institute of Public Sector Accounting Compartments), Chief of Editor in the Journal of Public Sector Accounting and Finance (JAKSP), and representatives of Asian academics in the Public Sector Committee (IFAC). The author has also served as Chair of the Public Sector Financial Accounting Standards Board - Indonesian Institute of Accountants (IAI). At least, the author has written many books and various publications in national and international journals.

Sukamdi Sukamdi, Universitas Gadjah Mada

Sukamdi is an assistant professor at the Faculty of Geography and now also works as a senior researcher at the Center for Population and Policy Studies at Gadjah Mada University. Her main interests are population and development, including among others international and internal migration, urbanization, poverty, employment, and family planning. His experience as a consultant was recorded in various national and international institutions in Indonesia, for example the World Bank, UNFPA (Unted Nation for Population Fund), AFP (Advance Family Planning), Bappenas (National Development Planning Board), BKKBN (National Family Planning and Population Body) , Some important publications cover various topics, such as International Migration Policy During SBY Era (with Chris Manning), Exploring typology of residents staying in disaster-prone areas (with Rjanta and Choirul Amin), Women’s bargaining power and household expenditure in Indoesia (with Evita P), Internal Migration in Indonesia (with Ghazy, M), Data Availability for Assessing Sustainabe Development Goals in Indonesia, Migration, Poverty and Survival Strategies in Prone Areas, Transnational Families and the Family nexus: Perspectives of Indonesian and Filipino Children Left Behind by Migrant Parent(s) (with Graham E, Jordan L, Yeoh BSA, Lam T, Asis M), and The Dynamic of Civil Socciety in Indonesia (eds with Lau S; Laksono, P; and R. Habraken).

References

-