The Development of MSMEs and the Growth of Peer-to-Peer (P2P) Lending in Indonesia

Category: 2023 Series Written by Tulus T.H. Tambunan, Wimboh Santoso, Ida Busneti, Sukarela Batunanggar Hits: 1523

Tulus T.H. Tambunan
Faculty of Economics and Business
Universitas Trisakti
Jakarta-Indonesia

Wimboh Santoso
Financial Service Authority (OJK)
Jakarta, Indonesia

Ida Busneti
Faculty of Economics and Business
Universitas Trisakti
Jakarta-Indonesia

Sukarela Batunanggar
Financial Service Authority (OJK)
Jakarta, Indonesia

 

Introduction

It is widely recognized that micro, small, and medium enterprises (MSMEs) play a vital role in economic development in Indonesia. Moreover, because they are very labor intensive and account for about 99 percent of the total number of companies and 97 percent of the total employment, while large enterprises (LEs) are only, respectively, one and three percent (Table 1), MSMEs are very important for job creation, poverty reduction and reduction of inequality in income and economic development between regions. However, MSMEs face many obstacles that make it difficult to expand or survive, and limited access to funding from formal sources is the most serious.

 

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