Empowering Women Micro Entrepreneurs in Indonesia
Micro, Small and Medium Enterprises (MSMEs) are of vital importance to the socio-economic growth of a country. In Indonesia, MSME sector also contribute significantly to employment and income generation. According to the data of Indonesian Ministry of Cooperative and SME, MSMEs in Indonesia contribute almost 58 percent of real GDP in 2012. MSMEs account for more than 97 percent of total employment in 2012. Despite the high contribution to employment generation, many MSMEs face difficulties to grow and expand their business to become big enterprises.
The challenges of MSMEs are even greater for women entrepreneurs. Although there is a global rise of women entrepreneurs reported, their growth has not been showing the promising/a promising trend. The World Bank’s Gender at Work (2014) also reports that women are more economically excluded than men on virtually every global measure. One of the main challenges faced by MSMEs, including women micro entrepreneur is the lack of access to finance, as discussed in World Bank study on Improving Access to Finance in Indonesia (2011).
Women entrepreneurs have a lower propensity to seek external funding since most of them operate in sectors at lower capital intensity and at lower scale (OECD, 2014). Moreover, women are less educated than men and have lower financial literacy. Women entrepreneurs also tend to have a lower access to bank services than men such as checking and saving accounts. Global Findex stated that only 19.21 percent of women in Indonesia have accounts at formal financial institutions and only 8.15 percent received loan from financial institutions.
In order to support and strengthen the role of women micro entrepreneurs, DEFINIT and ACG were selected by the World Bank to conduct the survey on “Empowering Women Micro-Entrepreneurs in Indonesia.” The purpose of this survey is to identify the challenges and opportunities encountered by women micro entrepreneurs in Indonesia. This research mapped business condition and the economic potential of women micro entrepreneurs and identified the obstacles encountered by them.
This survey consists of two types of survey, i.e., 1) demand-side survey and 2) supply-side survey. This survey was conducted in 8 provinces in Indonesia, in 16 districts, and in 48 villages. The number of respondents that had been interviewed in demand-side survey is 1.633 respondents. Meanwhile, the number of respondents in supply-side survey that are represented by local governments, Micro Financial Institutions (MFIs), and Business Development Service (BDS) providers is 343 respondents. The result of this study could show the real condition of women micro entrepreneurs in Indonesia. Therefore, the resulted policy recommendation can effectively support and strengthen women micro entrepreneurs.