This study examines the impact of the COVID-19 Pandemic on MSMEs and how the effectiveness of utilizing business capital assistance paid by the government affects their survival during the COVID-19 Pandemic. Through a survey of 110 respondents (namely debtors/beneficiaries), this case study finds that the COVID-19 Pandemic has caused business delays, so the government assistance program has become the key to MSME business continuity during the COVID-19 Pandemic. With government assistance, the business actors in the sample of this study could maintain their business. Even though the overall labor force is decreasing and income is decreasing, some small, medium, and micro-enterprises can maintain or even increase workers and their turnover due to government assistance. This study recommends continuing the assistance program for MSMEs by loosening requirements and focusing on new beneficiaries, an integrated MSME database, and in the future, the assistance program needs to be integrated with financial literacy and MSME innovation programs. The policy implication of this study is that the government's economic recovery plan during the future recession needs to target MSMEs.

KEYWORDS: Effectiveness of Utilization, Business Capital Assistance, MSMEs


Effectiveness of Utilization, Business Capital Assistance MSMEs



  1. Abisuga-oyekunle, O. A., & Patra, S. K. (2019). SMEs in sustainable development : Their role in poverty reduction and employment generation in sub-Saharan Africa. African Journal of Science, Technology, Innovation and Development, 0(0), 1–15. https://doi.org/10.1080/20421338.2019.1656428
  2. Adam, N. A., & Alarifi, G. (2021). Innovation practices for survival of small and medium enterprises (SMEs) in the COVID-19 times: the role of external support. Journal of Innovation and Entrepreneurship, 10(1). https://doi.org/10.1186/s13731-021-00156-6
  3. Al-Hyari, K. (2020). Initial Empirical Evidence on How Jordanian Manufacturing Smes Cope With The COVID-19 Pandemic. Academy of Strategic Management Journal, 19(1), 1–12.
  4. Alam, M. K. (2021). A systematic qualitative case study: questions, data collection, NVivo analysis and saturation. Qualitative Research in Organizations and Management: An International Journal, 16(1), 1–31. https://doi.org/10.1108/QROM-09-2019-1825
  5. Amankwah-amoah, J. (2021). COVID-19 pandemic and innovation activities in the global airline industry : A review. Environment International 156 (2021) 106719, 156. https://doi.org/10.1016/j.envint.2021.106719
  6. Amuda, Y. J. (2020). Impact of Coronavirus on Small and Medium Enterprises (Smes): Towards Post-Covid-19 Economic Recovery in Nigeria. Academy of Strategic Management Journal, 19(6), 1–11.
  7. Asian Development Bank. (2020). Outlook 2020 (Issue September). https://globalfert.com.br/pdf/outlook_globalfert2020.pdf
  8. Bai, C., Quayson, M., & Sarkis, J. (2021). COVID-19 pandemic digitization lessons for sustainable development of micro-and small- enterprises. Sustainable Production and Consumption, 27, 1989–2001. https://doi.org/10.1016/j.spc.2021.04.035
  9. Bank of Indonesia. (2020). Indonesia Economic Report 2020 “Synergy to Build Optimism for Economic Recovery.” In Bersinergi Membangun Optimisme Pemulihan Ekonomi. https://www.bi.go.id/id/publikasi/laporan-tahunan/perekonomian/Documents/9_LPI2020.pdf
  10. Bartik, A. W., Bertrand, M., Cullen, Z., Glaeser, E. L., Luca, M., & Stanton, C. (2020). The impact of COVID-19 on small business outcomes and expectations. Proceedings of the National Academy of Sciences of the United States of America, 117(30), 17656–17666. https://doi.org/10.1073/pnas.2006991117
  11. Belghitar, Y., Moro, A., & Radić, N. (2021). When the rainy day is the worst hurricane ever: the effects of governmental policies on SMEs during COVID-19. Small Business Economics, Ons 2020. https://doi.org/10.1007/s11187-021-00510-8
  12. BPS. (2020). LAPORAN BULANAN DATA SOSIAL EKONOMI OKTOBER 2020 BADAN PUSAT STATISTIK. https://www.bps.go.id/publication.html?Publikasi%5BtahunJudul%5D=2020&Publikasi%5BkataKunci%5D=ekonomi&Publikasi%5BcekJudul%5D=0&Publikasi%5BcekJudul%5D=1&yt0=Tampilkan
  13. BPS. (2021). Berita Resmi Statistik. Bps.Go.Id, 27, 1–8. https://yogyakarta.bps.go.id/pressrelease/2021/08/05/1161/pertumbuhan-ekonomi-diy-triwulan-ii-2021.html
  14. Burhan, M., Salam, M. T., Hamdan, O. A., & Tariq, H. (2021). “Crisis management in the hospitality sector SMEs in Pakistan during COVID-19″. International Journal of Hospitality Management, 98(July), 103037. https://doi.org/10.1016/j.ijhm.2021.103037
  15. Caballero-Morales, S. O. (2021). Innovation as recovery strategy for SMEs in emerging economies during the COVID-19 pandemic. Research in International Business and Finance, 57(January), 101396. https://doi.org/10.1016/j.ribaf.2021.101396
  16. Caraka, R. E., Kurniawan, R., Nasution, B. I., & Jamilatuzzahro, J. (2021). Micro , Small , and Medium Enterprises ’ Business Vulnerability Cluster in Indonesia : An Analysis Using Optimized Fuzzy Geodemographic Clustering sustainability Micro , Small , and Medium Enterprises ’ Business Vulnerability Cluster in Indonesia : An Ana. July. https://doi.org/10.3390/su13147807
  17. Coordinator Ministry for the economy, 2020. (2020). Permenko 2 Tahun 2021 publish. https://jdih.ekon.go.id/pencarian/ODU=/UGVybWVua28gMiBUYWh1biAyMDIxIHB1Ymxpc2gucGRm/6/download
  18. DjPb Report, 2020. (2020). Pulihkan Asa Kuatkan Bangsa.
  19. DJPK 2021. (n.d.). Dasar Hukum. https://www.ekon.go.id/source/publikasi/sistem-informasi-kredit-program.pdf
  20. Dörr, J. O., Licht, G., & Murmann, S. (2021). Small firms and the COVID-19 insolvency gap. Small Business Economics. https://doi.org/10.1007/s11187-021-00514-4
  21. Effendi, M. I., Sugandini, D., & Istanto, Y. (2020). Social Media Adoption in SMEs Impacted by COVID-19: The TOE Model*. Journal of Asian Finance, Economics and Business, 7(11), 915–925. https://doi.org/10.13106/jafeb.2020.vol7.no11.915
  22. García-p, D., Ruiz-palomo, D., & Di, J. (2021). Technology in Society Analysing the roles of CEO ’ s financial literacy and financial constraints on Spanish SMEs technological innovation. Technology in Society 64 (2021) 101519, 64(December 2020). https://doi.org/10.1016/j.techsoc.2020.101519
  23. Gregurec, I., Furjan, M. T., & Tomičić‐pupek, K. (2021). The impact of covid‐19 on sustainable business models in smes. Sustainability (Switzerland), 13(3), 1–24. https://doi.org/10.3390/su13031098
  24. Hutahayan, B., & Yufra, S. (2019). Innovation speed and competitiveness of food small and medium-sized enterprises (SME) in Malang, Indonesia: Creative destruction as the mediation. Journal of Science and Technology Policy Management, 10(5), 1152–1173. https://doi.org/10.1108/JSTPM-12-2017-0071
  25. IMF. (2020). Policy Responses to COVID19. Imf. https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#I
  26. Jahangiri, M., Azmon, H., Daneshvar, A., Keshmiri, F., & Khaleghi, H. (2019). Occupational Health Problems and Safety Conditions among Small and Medium-Sized Enterprises : A Cross- sectional Study in Shiraz , Iran. Annals of Global Health, 85(1), 1–6. https://annalsofglobalhealth.org/articles/10.5334/aogh.2438/
  27. Kemenperin. (2015). Laporan Kinerja Kementerian Perindustrian Tahun 2014.
  28. Lamoureux, S. M., Movassaghi, H., & Kasiri, N. (2019). The Role of Government Support in SMEs’ Adoption of Sustainability. IEEE Engineering Management Review, 47(1), 110–114. https://doi.org/10.1109/EMR.2019.2898635
  29. Lampadarios, E., Kyriakidou, N., & Smith, G. (2017). Towards a new framework for SMEs success: A literature review. International Journal of Business and Globalisation, 18(2), 194–232. https://doi.org/10.1504/IJBG.2017.081954
  30. Lisa, O. (2019). The Effect of Entrepreneurial Behavior and Organizational Innovation on MSMEs Performance. JEMA: Jurnal Ilmiah Bidang Akuntansi Dan Manajemen, 16(2), 160. https://doi.org/10.31106/jema.v16i2.2709
  31. Lu, L., Peng, J., Wu, J., & Lu, Y. (2021). Perceived impact of the Covid-19 crisis on SMEs in different industry sectors: Evidence from Sichuan, China. International Journal of Disaster Risk Reduction, 55(24). https://doi.org/10.1016/j.ijdrr.2021.102085
  32. Lutfi, M., Buntuang, P. C. D., Kornelius, Y., Erdiyansyah, & Hasanuddin, B. (2020). The impact of social distancing policy on small and medium-sized enterprises (SMEs) in Indonesia. Problems and Perspectives in Management, 18(3), 492–503. https://doi.org/10.21511/ppm.18(3).2020.40
  33. ministry of finance. (2020). Laporan Bendahara umum negara 2020 (Vol. 17). https://djpb.kemenkeu.go.id/portal/id/data-publikasi/publikasi-cetak/laporan-keuangan-bendahara-umum-negara-lk-bun.html
  34. Mukhtar, S., Suseno, D. A., Semarang, U. N., & Wibowo, A. (2020). Influence of Information Technology towards the Development Economics of SMEs in Indonesia. September, 280–291. https://doi.org/10.18488/journal.73.2020.83.280.291
  35. Ndiaye, N., Abdul Razak, L., Nagayev, R., & Ng, A. (2018). Demystifying small and medium enterprises’ (SMEs) performance in emerging and developing economies. Borsa Istanbul Review, 18(4), 269–281. https://doi.org/10.1016/j.bir.2018.04.003
  36. OECD, 2017. (2017). Enhancing the Contributions of SMEs in a Global and Digitalised Economy. Meeting of the OECD Council at Ministerial Level, 1, 7–8. https://www.oecd.org/mcm/documents/C-MIN-2017-8-EN.pdf
  37. Pakpahan, 2020. (2020). Covid-19 Dan Implikasi Bagi Usaha Mikro, Kecil, Dan Menengah. Jurnal Ilmiah Hubungan Internasional, 0(0), 59–64. https://doi.org/10.26593/jihi.v0i0.3870.59-64
  38. Park, S., Lee, I. H., & Kim, J. E. (2020). Government support and small- and medium-sized enterprise (SME) performance: the moderating effects of diagnostic and support services. Asian Business and Management, 19(2), 213–238. https://doi.org/10.1057/s41291-019-00061-7
  39. PATMA, T. S., WARDANA, L. W., WIBOWO, A., & NARMADITYA, B. S. (2020). The Shifting of Business Activities during the COVID-19 Pandemic: Does Social Media Marketing Matter? Journal of Asian Finance, Economics and Business, 7(12), 283–292. https://doi.org/10.13106/JAFEB.2020.VOL7.NO12.283
  40. Prasad, K. D. V, Vaidya, R., & Kumar, V. A. (2015). A Study On Causes Of Stress Among The Employees And Its Effect On The Employee Performance At The Workplace In An International Agricultural Research Institute, Hyderabad, Telangana, India. International Journal of Mangement Research and Business Strategy, 04(10), 67–82.
  41. Prijadi, R. (2020). Financing needs of micro- enterprises along their evolution. International Journal of Ethics and Systems, 36(2), 263–284. https://doi.org/10.1108/IJOES-05-2018-0071
  42. Priyono, A., & Moin, A. (2020). Identifying-digital-transformation-paths-in-the-business-model-of-smes-during-the-covid19-pandemic2020Journal-of-Open-Innovation-Technology-Market-and-ComplexityOpen-Access.pdf. Journal of Open Innovation: Tecnology, Market, and Complexity, 6(4), 104.
  43. Ratnasingam, J., Khoo, A., Jegathesan, N., Wei, L. C., Latib, H. A., Thanasegaran, G., Liat, L. C., Yi, L. Y., Othman, K., & Amir, M. A. (2020). How are small and medium enterprises in Malaysia’s furniture industry coping with COVID-19 pandemic? Early evidences from a survey and recommendations for policymakers. BioResources, 15(3), 5951–5964. https://doi.org/10.15376/biores.8.3.5951-5964
  44. Razumovskaia, E., Yuzvovich, L., Kniazeva, E., Klimenko, M., & Shelyakin, V. (2020). The effectiveness of Russian government policy to support smes in the COVID-19 pandemic. Journal of Open Innovation: Technology, Market, and Complexity, 6(4), 1–20. https://doi.org/10.3390/joitmc6040160
  45. She, Q., Yu, Y., & Wu, K. (2020). Is “Born Global” a Viable Market Entry Mode for the Internationalization of SMEs? Evidence from China before COVID-19. Emerging Markets Finance and Trade, 56(15), 3599–3612. https://doi.org/10.1080/1540496X.2020.1854720
  46. Ssenyonga, M. (2021). Cogent Economics & Finance Imperatives for post COVID-19 recovery of Indonesia ’ s education , labor , and SME sectors FINANCIAL ECONOMICS | REVIEW ARTICLE Imperatives for post COVID-19 recovery of Indonesia ’ s education , labor , and SME sectors. Cogent Economics & Finance, 9(1), 1–91. https://doi.org/10.1080/23322039.2021.1911439
  47. Statistik, B. P. (n.d.). BPS Release September 2020. https://www.bps.go.id/publication/download.html?nrbvfeve=ZTMyZWE3YmVkMjg5ZmQ3ZTU1OTE5MTBl&xzmn=aHR0cHM6Ly93d3cuYnBzLmdvLmlkL3B1YmxpY2F0aW9uLzIwMjAvMDkvMTAvZTMyZWE3YmVkMjg5ZmQ3ZTU1OTE5MTBlL2xhcG9yYW4tYnVsYW5hbi1kYXRhLXNvc2lhbC1la29ub21pLXNlcHRlbWJlci0yMDIw
  48. Tran et al. (2017). How does working capital management affect the profitability of Vietnamese small and medium sized enterprises ? Introduction. Https://Www.Emerald.Com/Insight/Publication/Issn/1462-6004, 24(1), 2–11. https://www.emerald.com/insight/content/doi/10.1108/JSBED-05-2016-0070/full/html
  49. UNCTAD. (2020). The Coronavirus shock. https://unctad.org/system/files/official-document/gds_tdr2019_update_coronavirus.pdf
  50. United Nations. (2020). Impact of the Coronavirus Outbreak on Global FDI. United Nations Conference on Trade and Development, Special Is(March 2020), 5. https://unctad.org/press-material/impact-covid-19-pandemic-global-fdi-and-global-value-chains-updated-analysis
  51. Wang, S. S., Goh, J. R., Sornette, D., Wang, H., & Yang, E. Y. (2021). Government support for SMEs in response to COVID-19: theoretical model using Wang transform. China Finance Review International, 11(3), 406–433. https://doi.org/10.1108/CFRI-05-2021-0088
  52. Wang, Y. (2016). What are the biggest obstacles to growth of SMEs in developing countries? – An empirical evidence from an enterprise survey. Borsa Istanbul Review, 16(3), 167–176. https://doi.org/10.1016/j.bir.2016.06.001
  53. Warsame, A. A. (2020). The Impacts of COVID 19 on Small and Medium Enterprises. 12(25), 96–105. https://doi.org/10.7176/EJBM/12-25-11
  54. Williams, S., & Schaefer, A. (2013). Small and Medium-Sized Enterprises and Sustainability: Managers’ Values and Engagement with Environmental and Climate Change Issues. Business Strategy and the Environment, 22(3), 173–186. https://doi.org/10.1002/bse.1740
  55. Zimon, G., Babenko, V., Sadowska, B., Chudy-Laskowska, K., & Gosik, B. (2021). Inventory management in smes operating in polish group purchasing organizations during the covid-19 pandemic. Risks, 9(4), 1–16. https://doi.org/10.3390/risks9040063