VENTURE CAPITAL AS AN ALTERNATIVE FUNDING FOR MICRO SMALL AND MEDIUM ENTERPRISES (UMKM) IN MEDAN

Zulfi Chairi,Afrita Afrita,Eko Yudhistira

doi:10.23917/jjr.v9i2.9020

Abstract

The Doer of Micro, Small and Medium Enterprises have an important role to make and spur a state economic development. According to the Data of Ministry of Cooperation and UKM (2014), the number of cooperation and UMKM is more than 98% of the total entrepreneur in Indonesia. The number of UMKM is more than 58 million enterprises and contribute to pervade more than 97% of man power or in number is around 107 million people. This is a national asset for the sustainable economic development, but there is a funding problem as a classic problem for UMKM. Venture Capital is the most appropriate fund for UMKM as the source of financial capital. The Investment Model of Venture Capital with the participation of capital or in other funding form into a company as the business partner(Investee) in certain period of time has a good prospect, good potential of value creation, feasible, although not bankable. Modal venture investment is more appropriate to fund the UMKM and Start Up because can give fund to the company which has no standard as a company and operational history. This research is purposed to know the law regulation of UMKM empowerment through venture capital funding in Medan and how the deal between the venture capital funding institution and UMKM. The method is descriptive research which using primary and secondary data. Keywords : MSME, Funding, Venture Capital

Highlights

Micro, small and medium enterprises or called UMKM is a group of enterprises which is important for the economy of Medan
Novelty/Originality of this study: There is no research about the venture capital funding which help the MSME in Medan before
Zulfi Chairi et al INTRODUCTION Micro, small and medium enterprises or called UMKM is a group of enterprises which is important for the economy of Medan

Summary

Introduction

Small and medium enterprises or called UMKM is a group of enterprises which is important for the economy of Medan. That’s because UMKM is a business sector which has the biggest number with the significant role to absorb man power to increase the PDB of society. It becomes an activator of area development and economy establishment. UMKM sector has a big marketplace because there will always a marketplace for their product or services. That’s because UMKM is the producer of goods and services for the middle to law class society with low purchasing capacity. The other reason is UMKM able to survive in crisis because the capital is from their own (Bagus Ardiyanto, 2013)

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