Several Factors Contributing to the Closure of MSMEs in Early Q2 2021

Cindy Mutia Annur 30/06/2021 18:00 WIB

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In March-April 2021, 7.1% of Indonesian MSMEs ceased operations. Of that number, 45% closed due to capital problems.

Reasons for UMKM Business Closures in March-April 2021

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Several Factors Contributing to the Closure of MSMEs in Early Q2 2021

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Reasons for UMKM Business Closures in March-April 2021

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A Mandiri Institute survey shows that 7.1% of micro, small, and medium enterprises (MSMEs) in Indonesia ceased operations in March-April 2021. The main reason cited by 45% of respondents for closing their businesses was capital constraints.

23% of respondents stopped operating because they perceived a lack of future demand for their businesses. This was further exacerbated by the impact of the COVID-19 pandemic on trade.

14% of respondents ceased operations due to difficulties in sourcing raw materials, while 9% stopped because they switched professions to become employees.

Meanwhile, the majority (84.8%) of MSMEs had resumed normal operations by March-April 2021. A further 8.1% were still operating with limitations.

The Mandiri Institute research was conducted online with 505 Indonesian MSMEs. The survey, conducted in March-April 2021, aimed to assess MSME recovery and digital penetration.

Editor : Dimas Jarot Bayu

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."