Heaptalk, Jakarta — PT Bank OCBC NISP Tbk (OCBC), in collaboration with NielsenIQ (NIQ) Indonesia, has launched the OCBC Business Fitness Index (BFI) for the second time. This study aims to provide insights into the financial behavior of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia.
The study revealed that MSMEs in Indonesia have achieved a good score of 60 in understanding financial management systems. This score indicates that MSMEs have improved in recording and managing their finances, regularly monitoring their business profit and loss, and effectively maintaining necessary capital. Although this is an improvement compared to the previous year, only 46% of MSMEs have fully separated their business and personal finances, which can impact cash flow and business sustainability.
The study also demonstrated that MSMEs that have become legal entities tend to better understand financial management systems and business risk planning. This has resulted in a much healthier financial score of 60.2 compared to those without a legal entity, who scored 47.4. This may be since these businesses have more straightforward and measurable business plans and targeted business strategies and have consistently kept accurate, regular financial records. Such financial documentation can serve as a solid foundation and benchmark for determining the sustainability of the business.
The government has enacted the Job Creation Law No. 11 of 2020 to facilitate micro and small businesses’ establishment of a legal entity as a sole proprietorship limited liability company. This regulation allows the establishment of a limited liability company (PT) by a single individual as both the shareholder and the director. This is seen as a way to accelerate MSMEs with growth aspirations to move up the ladder immediately.
“The research results show that 80% of MSMEs are not yet registered as legal entities, and only 3% of Indonesian MSMEs are registered as Sole Proprietorship PTs. Most registered as Sole Proprietorship PTs are small businesses, while micro businesses are still very low. This indicates that there is still a need for improvement to help MSMEs level up,” said Inggit Primadevi, Director of Consumer Insights at NIQ Indonesia, during an OCBC talk show at PIM 3, Jakarta, on Saturday (08/17).
Responding to this, Sari Kartika, SME Proposition Division Head at OCBC, stated, “Separating business and personal income is a very appropriate first step for MSMEs to level up, especially by using a business entity identity. However, many entrepreneurs face challenges in opening a business account, mostly related to the application processing time and documentation required.”
“To address this challenge, OCBC has introduced an innovative solution that makes it easier for businesses to apply for business entity current accounts entirely digitally, which can be done in just a few minutes. This innovation allows MSMEs, particularly legal entities, to open business-specific accounts more easily and quickly, using only a gadget without visiting the bank. OCBC is the first bank in Indonesia to introduce this innovation,” Sari concluded.
