Bank Indonesia's CSR: A Model for Social Entrepreneurship Transformation

Abstract

Context: This research explores how central bank social programs can empower micro-level Small and Medium Enterprises (SMEs) in Indonesia. The observed economic growth suggests both micro and macro contributions are at play. The study's practical value lies in aiding SMEs enhance their managerial skills, technical and marketing capabilities across local, regional, and international markets. The programs have enhanced human capital development, equipping individuals with the essential skills and knowledge to achieve the SDGs, particularly in developing regions. Purpose: The study aims to describe the social entrepreneurship transformation model implemented by Bank Indonesia (BI) as part of its Corporate Social Responsibility (CSR) efforts. Methods: Narrative-based qualitative methods and theme analysis were utilized. Data collection was done through in-depth interviews and observations. The subjects are 7 Small and Medium-sized Enterprise (SME) economic actors involved in BI's CSR program. Result: The socio-economic program implemented by BI includes training, technical guidance, and the provision of infrastructure to partner SME groups. This program has led to managerial improvement, market expansion, cost savings, production, and profit for these SME partners. On a macro scale, BI's CSR initiatives involving SMEs have enhanced its public reputation and bolstered its capacity to manage inflation, finance, and digital transformation. These outcomes align with the broader goal of policy coherence and support for the Sustainable Development Goals. Contribution: This study finds that the Indonesian central bank's initiatives contribute to improved economic performance for SMEs. It further supports the theory that state involvement, like social entrepreneurship initiatives driven by the central bank, can bridge the gap between government policies and local entrepreneurial activities.