Analysis of Factors Affecting the Development of the Number of Umkm in Indonesia

The role of the MSME sector is very strategic for the development of the national economy. MSMEs as the anchor of the national economy have proven to be able to survive the economic crisis that occurred in 1997. However, in its sustainability, the role of MSMEs continues to be overshadowed by difficulties in competing due to various factors that influence it. Therefore, this study aims to analyze the factors that influence the development of the number of MSMEs in Indonesia. The research variables used in this study are inflation variables, interest rates, the exchange rate of the rupiah against the dollar and the number of MSMEs in Indonesia. The type of data used in this study is quantitative data in the form of monthly with a time range of January 2016 to December 2020. The data sources are obtained from BPS, Ministry of Cooperatives and MSMEs. The writing method uses multiple regression in the form of logarithms. The results of the analysis conclude that inflation and interest rate variables have no significant effect on the development of the number of MSMEs in Indonesia. This is due to the fact that people's purchasing power is still weak due to economic shocks originating from the health sector that hit almost all countries in the world, including Indonesia. The rupiah exchange rate variable has a significant effect on the development of the number of MSMEs in Indonesia. the majority of MSME actors in Indonesia, most of the inputs used for production come from abroad, so that exchange rate pressures have an impact on the number of MSME businesses in Indonesia.