Micro, small and medium enterprises in times of crisis: Evidence from Indonesia

Abstract

ABSTRACT This descriptive study of micro-, small, and medium-sized enterprises (MSMEs) in Indonesia has two goals: (a) to estimate the impact of the COVID-19 pandemic crisis on MSMEs and to compare it with the two previous crises; that is, the 1998–1999 Asian financial crisis and the 2008–2009 global financial crisis; and (b) to explore crisis mitigation measures (CMMs) adopted by affected MSMEs. This study is based on a literature study and a survey of 137 MSMEs in several cities and sectors in Indonesia during the period of May to September 2020. It reveals that different types of crises have different transmission channels through which the crises affect MSMEs. CMMs adopted by affected MSMEs also vary, with different types of crises and different business risks. To the author’s knowledge, it is the first study on how such crises affect MSMEs and through what transmission channels, and how the affected MSMEs respond.