The Economic Crisis and the Role of MSMEs in Indonesia

Oct 13, 2025 by windailys.com 3 views

Analysis of the Effect of Partnership Program on the Development of UKM Fostered Mitra PT. Perkebunan Nusantara III Medan

The Economic Crisis and the Role of MSMEs in Indonesia

The economic crisis that hit Indonesia in mid-1997 resulted in a significant decline of the national economy. The crisis had a profound impact on the country's economic growth, leading to widespread unemployment and poverty. To overcome the crisis and encourage economic growth, the government sought to increase the role of micro, small, and medium enterprises (MSMEs) in the economy. MSMEs are considered to have great potential to survive in the middle of a crisis and are able to absorb a lot of labor, thereby reducing unemployment.

The Partnership Program: A New Policy for MSME Development

Although various policies have been issued to support the growth of MSMEs, the hopes of MSME actors have not been fully fulfilled. Therefore, the government issued a new policy through the Decree of the Minister of BUMN No. Kep1MBU/2003, better known as a partnership program. This regulation requires BUMN to allocate 1% to 5% of their profits for the development of MSMEs that are fostered partners. The partnership program aims to provide financial and non-financial support to MSMEs, enabling them to grow and develop sustainably.

Research Objectives and Methods

This study aims to analyze the effect of the implementation of the partnership program by PT Perkebunan Nusantara III Medan (PTPN III Medan) on the growth and development of MSMEs of its fostered partners. The researchers used the time series data for 10 years (1995-2004) and employed the following variables:

Y variable: the growth of MSMEs for PTPN III Medan fostered partners
Variable X1: credit supply
Variable X2: the number of workers

Research Results

The results of the study showed that the variable X1 (credit supply) had no significant effect on the variable Y (MSME growth). However, the variable X2 (number of labor) has a significant influence, which means that this program is successful in reducing unemployment.

Analysis and Recommendations

The results of the study indicate that the PTPN III Medan partnership program had a positive impact in employment, but it was not yet optimal in encouraging the growth of MSMEs. This is because the credit supply provided by PTPN III Medan is still limited. Therefore, PTPN III Medan needs to increase access to credit for MSMEs for its fostered partners. Increasing credit access is expected to encourage the growth of MSMEs and improve the welfare of MSME actors.

Conclusion

The partnership program implemented by PTPN III Medan made a positive contribution in absorbing labor, but not yet optimal in encouraging MSME growth. Increasing access to credit is expected to increase the effectiveness of the partnership program and have a greater impact on the growth and development of MSMEs of PTPN III Medan fostered partners.

Suggestion

This research can be taken into consideration for PTPN III Medan in developing a more effective partnership program development strategy, as well as an evaluation material for the government in maximizing the role of BUMN in encouraging the growth of MSMEs in Indonesia.

Implications for Policy and Practice

The findings of this study have several implications for policy and practice. Firstly, the government should provide more support to BUMN in increasing access to credit for MSMEs. Secondly, PTPN III Medan should develop a more effective partnership program development strategy that takes into account the needs of MSMEs. Finally, the government should evaluate the effectiveness of the partnership program and make necessary adjustments to ensure that it achieves its objectives.

Limitations of the Study

This study has several limitations. Firstly, the data used in the study is limited to 10 years, which may not be representative of the current situation. Secondly, the study only focuses on the partnership program implemented by PTPN III Medan, and does not consider other factors that may affect the growth of MSMEs. Finally, the study does not provide a detailed analysis of the impact of the partnership program on the welfare of MSME actors.

Future Research Directions

Future research should focus on the following areas:

Evaluating the effectiveness of the partnership program in other BUMN
Analyzing the impact of the partnership program on the welfare of MSME actors
Developing a more effective partnership program development strategy that takes into account the needs of MSMEs
Investigating the role of other factors that may affect the growth of MSMEs

Conclusion

In conclusion, this study provides valuable insights into the effect of the partnership program on the development of MSMEs fostered by PTPN III Medan. The findings of the study suggest that the partnership program has a positive impact in employment, but not yet optimal in encouraging the growth of MSMEs. Increasing access to credit is expected to increase the effectiveness of the partnership program and have a greater impact on the growth and development of MSMEs of PTPN III Medan fostered partners.
Q&A: Partnership Program and MSME Development

Frequently Asked Questions

This article provides answers to frequently asked questions about the partnership program and its impact on MSME development.

Q: What is the partnership program?

A: The partnership program is a policy implemented by the government to support the growth and development of micro, small, and medium enterprises (MSMEs) in Indonesia. The program requires BUMN to allocate 1% to 5% of their profits for the development of MSMEs that are fostered partners.

Q: What are the objectives of the partnership program?

A: The objectives of the partnership program are to provide financial and non-financial support to MSMEs, enabling them to grow and develop sustainably. The program aims to increase access to credit, improve the welfare of MSME actors, and promote the growth of MSMEs.

Q: What are the benefits of the partnership program?

A: The benefits of the partnership program include:

Increased access to credit for MSMEs
Improved welfare of MSME actors
Promotion of the growth of MSMEs
Creation of jobs and reduction of unemployment
Contribution to the national economy

Q: What are the challenges faced by MSMEs in Indonesia?

A: MSMEs in Indonesia face several challenges, including:

Limited access to credit
Lack of skills and knowledge
Limited market access
High competition
Limited government support

Q: How can the partnership program address these challenges?

A: The partnership program can address these challenges by:

Increasing access to credit for MSMEs
Providing training and capacity building for MSME actors
Improving market access for MSMEs
Promoting competition and innovation among MSMEs
Providing government support and incentives for MSMEs

Q: What is the role of BUMN in the partnership program?

A: BUMN plays a crucial role in the partnership program by:

Allocating 1% to 5% of their profits for the development of MSMEs
Providing financial and non-financial support to MSMEs
Promoting the growth and development of MSMEs
Creating jobs and reducing unemployment

Q: What is the impact of the partnership program on MSME development?

A: The partnership program has a positive impact on MSME development, including:

Increased access to credit for MSMEs
Improved welfare of MSME actors
Promotion of the growth of MSMEs
Creation of jobs and reduction of unemployment
Contribution to the national economy

Q: What are the implications of the partnership program for policy and practice?

A: The partnership program has several implications for policy and practice, including:

The need for more support from the government to BUMN in increasing access to credit for MSMEs
The need for PTPN III Medan to develop a more effective partnership program development strategy
The need for the government to evaluate the effectiveness of the partnership program and make necessary adjustments

Q: What are the limitations of the partnership program?

A: The partnership program has several limitations, including:

Limited data and research on the impact of the program
Limited focus on the needs of MSME actors
Limited consideration of other factors that may affect the growth of MSMEs

Q: What are the future research directions for the partnership program?

A: Future research should focus on:

Evaluating the effectiveness of the partnership program in other BUMN
Analyzing the impact of the partnership program on the welfare of MSME actors
Developing a more effective partnership program development strategy that takes into account the needs of MSMEs
Investigating the role of other factors that may affect the growth of MSMEs