Small and Medium Enterprises in the regional economy West Papua have a critical and strategic role.
However, in the last three years, there has been a decline in the population of Small and Medium Enterprises in West Papua.
West Papua Small and Medium Enterprises Growth Challenges and Opportunities
With the increase in product quality standards for Micro, Small, and Medium Enterprises, several things regarding businesses must be developed, despite the challenges.
The following are some of the challenges and growth opportunities for West Papua Small and Medium Enterprises:
1. Population Decline
There has been a significant decrease in the Small and Medium Enterprises population in 2021 in West Papua or negative growth of -48.56 percent (3,468 units).
This condition caused a reduction in employment in the Small and medium enterprises sector by -40.95 percent.
This figure is 1.01 percent of the total working-age population in West Papua which decreased from the previous (2019), which reached 1.71 percent.
The role of Small and Medium Enterprises in the regions to achieve conditions for an equally prosperous society will not be achieved by itself.
2. The Need for Government Intervention
The condition of the decline in Micro, Small, and Medium Enterprises requires government intervention as a policy maker, the private sector, and business actors.
However, the impact on regional economic conditions has a different magnitude.
The difference lies in productivity and its contribution to state and regional income to encourage an increase in Gross Regional Domestic Product (GRDP) achievements.
The West Papua regional government also implements programs and activities to support the central government’s agenda for developing Micro, Small, and Medium Enterprises.
There are carrying out education and training for business actors, assisting with equipment,
And increasing entrepreneurial insight and technical skills, especially for indigenous Papuan entrepreneurs.
The Ultra Micro Financing Program has existed since 2017 and has brought tangible benefits to its beneficiaries.
Business actors can access it easily, quickly, and without additional collateral, and there is assistance from Ultra Micro dealers.
3. Forming Ultra Micro Financing
Ultra Micro Financing is a solution for businesses to finance their business amid the Covid-19 pandemic.
It is indicate by an increase in the number of disbursements and debtors during the Covid-19 pandemic.
The increase in Ultra Micro Financing in West Papua during the Covid-19 pandemic’s. Outbreak indicates the great hope that business actors have to rise from adversity.
In West Papua Province, Ultra Micro Financing from 2017 to 2021. In aggregate has distributed IDR 10.02 billion to 2,228 debtors.
And in the first year, the distribution of Ultra Micro financing was only realize for IDR 590.40 million for 277 debtors.
There was a slight decrease in 2018, with a total realization of IDR 338.50 million for 38 debtors.
Meanwhile, in 2021 the actual disbursement decreased to IDR 1.56 billion or 71.57 percent (yoy) for 288 debtors.
4. Advanced Regions Dominate
In terms of area, Sorong Regency is the most significant contributor. To the distribution of Ultra Micro Financing from 2017 to 2022,
With a total allocation of IDR 5.31 billion with 1320 debtors, followed by Manokwari Regency with IDR 1.43 billion with 217 debtors.
This condition indicates that regions with relatively more advanced economies. Still dominate the spread of Ultra Micro Financing.
The government hopes that the distribution of Ultra Micro Financing. Which has been present for five years in West Papua, can be more optimal. For increasing economic figures in the region.
Another hope is that more and more ultra-micro communities in all districts/cities in West Papua. Still depend on government assistance to upgrade their classes and become entrepreneurs.
There must be challenges and opportunities to advance Micro, Small, and Medium Enterprises. As is the case in West Papua, a less accessible place.