Under Pressure From COVID-19, Micro Business Actors Are Most Prone To Bankruptcy

JAKARTA - The COVID-19 pandemic has disrupted social economic activities, and the most affected are business actors. This is because due to the pandemic, social and economic activities have been limited, turnover has decreased while spending remains high.

Executive Director of CORE Indonesia Mohammad Faisal said, based on a survey by the Central Statistics Agency (BPS) regarding the impact of COVID-19 on business actors, there are three business sectors that are experiencing deep pressure. Thus, causing the most layoffs (PHK).

This survey was conducted on 34,559 respondents of business actors throughout Indonesia, in the period 10 to 16 July. The three sectors of the company that laid off the most employees in a short period of time were manufacturing 18.7 percent, construction 18.6 percent, accommodation and food and beverage 17.6 percent.

"From the results of this survey, it also turns out that the pandemic has affected the pattern of business operations. If we look at most large companies they can still operate as usual, but from the rest there are some companies that have stopped operating or reduced their capacity and that is significant by nearly 40 percent," he said, in virtual discussion, Thursday, September 17th.

According to Faisal, what has not been described in the BPS survey are informal business actors. In particular, micro business actors are most prone to bankruptcy. This is because they do not have a lot of capital reserves so that their business can continue to exist.

Furthermore, Faisal said, what the government should pay attention to is the fate of micro business actors. This is because the number of business actors in this sector reaches 98 percent of all MSME business people in Indonesia. In addition, this sector also absorbs a very large workforce.

"What has not been captured in the BPS survey are formal and informal ones. Because in our opinion, those who are more vulnerable are those in the informal sector," he said.

Faisal explained, the characteristics of the micro MSME actors were not having a business entity, traditional, minimal financial records, irregular income, easy to change types of business and not familiar with banking.

"We hope that later the importance of MSME stimulus for micro," he said.

According to Faisal, the provision of assistance to business actors provided by the government should not be stopped in the near future. Because it is one way to prevent them from entering into the threat of bankruptcy.

"The business stimulus must be maintained as long as there is economic pressure. Until later economic conditions recover and we estimate this until next year," he said.