Indonesian MSMEs serve as one of the important pillars of the country's economy, contributing 61% to GDP and 97% to labor absorption. Despite substantial government investments through programs like Kredit Usaha Rakyat (KUR) and UMKM Level Up, uptake remains limited. This study analyzes underlying factors affecting MSME engagement with government support programmes, focusing on DKI Jakarta as a case study. The research is anchored in Resource Based View and Theory of Planned Behaviour as theoretical foundations. Through in-depth interviews with 11 MSME actors, thematic analysis revealed five key themes: (1) scant awareness and knowledge of government programmes; (2) MSMEs plagued with challenges in internal organizational capabilities; (3) internal capability constraints serving as barriers to programme readiness; (4) willingness to participate contingent on several factors, with perceptions affecting willingness; and (5) policy and practice recommendations. Findings elucidate MSME openness to external support but hampered by perceived image and internal problems. The study concludes that government interventions must go beyond access provision and incorporate targeted capacity-building, better dissemination, and trust mechanisms to enhance engagement and program effectiveness. Complementary MSME-led initiatives including vocational alliances and peer learning groups are suggested to address internal capability gaps.
Yahania Yahania (Tue,) studied this question.
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