THE ADVANTAGES OF THE MICRO EQUITY MODEL FOR MSME BUSINESS RESILIENCE IN YOGYAKARTA DURING PANDEMIC

Bambang Dwi Hartono,Indra Yuliawan, Se, Mba, Qcro Yuliawan,Ahmad Diponegoro, Msie., Ph.D Diponegoro

doi:10.9744/jmk.23.2.167-176

Abstract

Many MSME business enterprises were severely hit during the Covid-19 pandemic. This study examined a micro equity financing model as an innovative answer to conventional loans in assisting MSME to survive during and after the pandemic. The micro equity financing model employed a profit-sharing system with flexible repayment and without collateral. A qualitative, descriptive data processing approach was employed. Interviews were conducted online with respondents of MSME that use the micro equity model in the Trust Network Finance (TNF) project in Yogyakarta. It was found more than 75% of MSMEs in Yogyakarta had experienced contractions on the marketing of their business. And more than 50% of MSME players in Yogyakarta had experienced problems in repaying loans due to the Covid-19 pandemic crisis. We suggested from the results that the micro equity model had shown to provide many benefits to MSME, especially in marketing and financial aspects, such as more accessible loan applications, flexible repayment schedules, and business assistance.

Highlights

The Indonesian economy has been hit by a crisis since the beginning of 2020, where the impact spread across all countries in the world
The proposed research method is a descriptive qualitative approach. It focuses on a clear description of the object of research to get a comprehensive picture of the application of the micro-equity model and its benefits for business resilience during the Covid-19 pandemic crisis, for MSME players participating in the Trust Network Finance (TNF) program in Yogyakarta
The researchers made conclusions to answer the formulation of this research problem: 1. The micro-equity model is a business financing innovation for MSMEs that has advantages over conventional models that are beneficial for MSME players in growing businesses before or after the pandemic and maintaining business during the Covid-19 pandemic

Summary

Introduction

The Indonesian economy has been hit by a crisis since the beginning of 2020, where the impact spread across all countries in the world. What distinguishes it from the economic problem in 1998 and 2008 is the cause. The current cause of the situation is the Covid virus, which has spread rapidly and massively across the globe. Have the medium to large-scale enterprises and the MSME players have been hit. With micro-business financing, development, and government regulations to support MSMEs' access to micro-business loans, most of them have become more dependent on financing. The MSMEs were hit by the current crisis

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Conclusion