15 Table 7: Challenges Faced by Entrepreneurs and MSMEs SEBAR Survey
Challenges for Entrepreneurs
5 10
15 20
25 30
35 40
Hu ma
n r es
ou rce
s Ac
ce ss
m ate
ria l
Fo rm
al inf
orm ati
on La
w
Im po
rt ex
po rt p
roc ed
ur es
Sl ow
or lo
st sa
les
Ma rke
t u np
re dic
tab ilit
y La
te no
pa ym
en t
Co st
of pro
pe rty
Ina bli
ty to
ob tai
n c re
dit Co
st of
cre dit
Int ele
ctu al
pr op
er ty
Co mp
eti tio
n Ot
he r
Num be
r of R
es po
nc es
Data Source: SEBAR Survey
I.6 Conclusions on the Characterization of Entrepreneurs and MSMEs in Indonesia Section
Although MSMEs are considered a driving force and are accredited for supporting the Indonesian economy during the Global Financial Crisis, the information above highlights that
there are still many challenges and constraints for entrepreneurs and MSMEs. Firstly, entrepreneurs and business owners can take responsibility into their own hands by better
utilizing a business plan, learning about professional business services, using government provided facilities, training employees, and continuously conducting market research. Moreover,
companies must look to enter into more value added activities, producing goods or services that demand higher prices that are demanded by wider markets. Secondly, as evidenced by the Ease
of Doing Business Indicator, the overall regulatory business environment is not as supportive of MSMEs as it should be. The government should continuously work to improve business
regulations and the time required to issue relevant permits. If regulations are improved, it can be expected that more companies will formally register, expanding the tax base and increasing
government revenues. Thirdly, business education and entrepreneurship skills need to be instilled into Indonesians at a young age. Almost everybody interviewed stated that the Indonesian
mindset hampers entrepreneurial activities. Fourthly, credit facilities must be improved to
improve profitable companies’ access to financing. An Angel Bank or a credit bureau would certainly help in directing funding to Indonesia’s future business leaders. Finally, infrastructure
needs to be improved. Hopefully, by implementing the Master Plan for Accelerating Indonesian Economic Development MP3EI, infrastructure across the country will improve and ease the
burden MSMEs face when operating their business. Recommendations on how to improve the
business environment can be referenced in the “Conclusion and Recommendations” section.
16
Chapter II: Financing for Entrepreneurs and MSMEs
