MSME PROBLEMS: STRATEGIES AND POLICIES

Study on Warung Ijo Bu Nur (Warjo)

Diah Ayu Prihantini1 , Junice Esti Pratiwi2, Kurnia Dwi Cahyani3 ,
Leni Tasari4, M.Andi Galib Rukmana5, M. Fariz Adil Wahid6

State Islamic University Raden Intan Lampung

Abstract

MSMEs are a cog in overcoming unemployment and creating jobs. The facts show that the job
opportunities created by the MSME group are far more than the workforce that can be absorbed by
large businesses. Because of that, it is hoped that MSMEs will continue to play an optimal role in
efforts to tackle unemployment, whose number tends to increase every year. This research uses a
qualitative method. The data collection method used is to utilize library research, namely the process
of searching through various existing literature, research, or studies related to the research being
carried out. Whereas the key to unlocking everything that helps solve problems in research. Related
sources include: encyclopedias, journals, books, and other scientific works. The researcher has also
conducted an analysis of the MSME problems in Warung Ijo Bu Nur (Warjo), namely in the form of
rising prices for basic commodities and it is difficult to get this because of ongoing inflation.
Consumers are impatient when queuing, making the atmosphere not conducive. Not only impatient
consumers, ojol drivers also have the same problem, namely being impatient to queue which results
in giving this food stall a bad rating. As a result, the green food stall, bu nur, has to shut down. labor,
because the wage system in this food stall is daily. Furthermore, there is an MSME Strategy and
Policy. Appropriate, comprehensive and durable policies and guidelines are needed to expand the
role of MSME in the future of the economy and the resilience of the problems it faces to have a
positive effect. The same thing was found by the Ministry of Cooperatives and the 2005 Small and
Medium Enterprises Agency, which presented the main approach to developing SMEs in Indonesia,
namely the Strategy for developing a promotional business environment Strategy for increasing
MSME access to production tools Strategy for developing entrepreneurship and MSME
competitiveness and Strategy for more synergy and audience participation. In this connection, so far
there are still many factors for SMEs that have difficulty getting a handle on getting loans from
banks, this is because entrepreneurs are not sufficiently secured and even entrepreneurs have limited
access to bank information further from the side of business development, SMEs have more
information from models finance certain goods, and vice versa Banks also need information about
these products it is likely to finance.
Keywords: MSME Problems, Strategy and Policy

INTRODUCTION

Indonesia is a country with abundant natural resources, but these abundant resources have not
been able to increase the progress of the national economy and in particular raise the standard of living
of society as a whole.This can be seen from the average level of education of the population which is
still low, the poverty rate of the population is still high, job opportunities are inadequate, and
unemployment is still high, as well as many other problems that still accompany the nation's journey
towards economic prosperity. To increase people's prosperity, improvements are needed in various
sectors, especially those that directly affect the improvement of people's welfare. The sector is micro,
small and medium enterprises (MSMEs).

MSMEs are an integral part of the people's economy which has a strategic position to realize a
national economic system that is more balanced, developed and just. To achieve this goal, the
implementation of the national economy is emphasized towards an economic system that is pro-people's
economy, equitable, reliable, just, accountable, transparent and has competitiveness in the regional and
global economic arena. In order to create this economic democracy, MSMEs need to be developed so that
they are able to increase their role and potential in realizing economic growth. MSMEs are the business
group with the largest number and have proven reliable in dealing with shocks from the economic crisis.
The business criteria included in the Micro, Small and Medium Enterprises have been regulated in the legal
framework. Based on Law Number 20 of 2008 concerning Micro, Small and Medium Enterprises
(MSMEs) there are several criteria used to define the meaning and criteria of Micro, Small and Medium
Enterprises.

According to Law Number 20 of 2008 concerning MSMEs as previously updated it is regulated in

Law Number 9 of 1995 concerning Small Enterprises, that the provisions for MSMEs are based on micro,
small and medium criteria. In accordance with Law Number 20 of 2008 concerning Micro, Small and
Medium Enterprises, MSMEs are defined as follows:

1. Micro enterprises are productive businesses owned by individuals and/or individual business
entities that meet the criteria for Micro Enterprises as regulated in this law.

2. Small Business is a productive economic business that stands alone, which is carried out by
individuals or business entities that are not subsidiaries or not branches of companies that are
owned, controlled, or become part either directly or indirectly of Medium or Large
Businesses that fulfill the criteria for Small Enterprises as referred to in this Law.
 3. Medium Business is a productive economic business that stands alone which is carried out by
individuals or business entities that are not subsidiaries or branches of companies that are
owned, controlled, or become a part either directly or indirectly with Small Businesses or
Large Businesses with a total net worth or annual sales results.

MSME are a cog in overcoming unemployment and creating jobs. The facts show that the job
opportunities created by the MSME group are far more than the workforce that can be absorbed by
large businesses. Therefore, it is hoped that MSMEs will continue to play an optimal role in efforts to
tackle unemployment, whose number tends to increase every year.

More than that, this sector has proven to be able to survive amidst the storm of the economic
crisis that hit several countries in the world when compared to large companies. Basri (2002) reveals
that MSME are able to survive because: 1) they produce consumer goods, especially non-durable
goods. This group of goods is characterized by a relatively low demand for changes in income; 2) the
majority of small businesses rely more on non-banking financing in terms of funding; 3) small
businesses generally carry out strict product specialization in terms of producing certain goods; 4) the
formation of MSMEs as a result of the many layoffs in the formal sector due to the prolonged
economic crisis.

The role of MSMEs in the Indonesian economy can be seen from:

1. Their position as the main actor in economic activity in various sectors;

2. The largest provider of employment opportunities;

3. An important player in local economic development and community empowerment;

4. Creator of new markets and sources of innovation;

Besides having the various strategic roles mentioned above, according to Ina Primiana
Indonesian MSME have acute problems, especially in the field of capital, namely:

1. Difficulty in accessing banks due to inability to provide the requirements to be bankable, in fact
Indonesia banks have helped MSMEs a lot so that it can be easier to get access to credit from
banks, but in reality not all MSMEs can meet the corrateral requirements (guarantee). This means
that there are still more MSMEs that have not been netted.

2. Ignorance of MSMEs on how to obtain funds or capital from sources other than banking which
can be a source of financing.

3. The unavailability of capital when the order comes. This means they need fast funds to fill orders.
It is impossible for banks to fulfill this because applying for bank loans takes a long time.
 The problems faced by MSME cannot be ignored, considering that the source of livelihood for
most households is currently still dependent on this sector. To overcome the problems faced and to
increase the role of MSMEs, appropriate strategies and policies that are comprehensive and sustainable
are needed.

From the results of studies and many previous studies regarding MSME in Indonesia, several
problems were encountered by MSME. The problem that is still a classic problem and generally still
occurs in most MSME in Indonesia is capital (funding). Regarding the problems faced by MSMEs,
strategies and policies are needed to overcome them. MSME in Indonesia must be able to
proactively and creatively develop themselves in addition to the support of all stakeholders. It is
hoped that this support will come from employers' associations, universities, related offices/agencies
within the district/ city and provincial governments.

Furthermore, this paper will discuss how to solve the problems that have been inherent in the
sector by using appropriate, comprehensive and sustainable strategies and policies, so that the sector
continues to make a major contribution to the national economy. With the research object of Warung
Ijo "Bu Nur" South Lampung Regency.

DISCUSSION
Concept and Definition of SME

Micro, Small and Medium Enterprises (MSME) have various definitions with the formulation of
small businesses under various names, for example (1) the Central Bureau of Statistics (BPS) using
the criteria of the number of people employed; (2) Ministry of Industry, using financial criteria such
as capital investment for machinery and equipment as well as investment per worker; (3) Bank
Indonesia, using financial criteria, such as wealth and turnover; (4) The Ministry of Trade uses the
criteria for maximum capital active for trading business; (5) KADIN (Chamber of Commerce and
Industry) uses capital criteria, which are adjusted to economic sectors.

MSME themselves can be divided into three types, namely micro businesses with 10 employees,
small businesses with 30 employees, and large businesses with up to 300 employees (LPPI & Bank
Indonesia, 2015). Law of the Republic of Indonesia No. 9 of 1995 concerning Small Businesses (1995),
in more detail states that small businesses are "Businesses that meet the criteria: have a net worth of at
most two hundred million rupiah, excluding land and buildings where the business is located, or have
annual sales proceeds of at most one billion rupiah, owned by Indonesian citizens, is independent, is
not a subsidiary or branch of a company that is owned, controlled or affiliated either directly or
indirectly with medium or large businesses, and is in the form of individual businesses, business entities
that are not legal entities, or business entities that legal entity, including cooperatives.
The role of MSME

MSME participate in making a good contribution to the business of the national economy. In
addition, MSME are also a source of livelihood for the very large population of Indonesia. Besides that,
MSME act as employers because they provide jobs for Indonesian people. This can be seen from the
number of SME business units in Indonesia. The role of large companies in the development of
MSMEs can be seen in the Cooperation Regulations in the Law which are often called partnerships.
Partnership is a legal relationship because of the bond resulting from the agreement of the parties of
medium and large companies.

By cooperating with and as a partner for large companies, it is hoped that they can support the
role and potential of SME in the National Development and Economy in accordance with Article 25
of Law no. 20 of 2008 concerning MSMEs, namely:

1. Government

Regional governments, the business world and the community facilitate both support and stimulate
partnerships based on reciprocity, mutual need, mutual trust, confirmation and benefit.

2. Partnerships between Micro, Small and Medium Enterprises and Business to Business Partnerships
Micro, Small and Medium With big business which includes process transfer, industrial know-how,
manufacturing and processing, marketing, capital, staff and technology.

3. Minister and Minister of Technology

Set incentives for large companies to enter into micro, small partnerships, and go through
transition stages innovation and development of export-oriented products, jobs, use of correct, user-
friendly and environmentally friendly technologies, and organize training.

MSME problems

The most crucial problem faced by MSME is very fine capital. MSME are still experiencing
problems in terms of increasing all forms of capital, both for work and investment. In this situation,
there is a bank lending authority that cooperates with MSME. The government has made it mandatory
for banks to distribute People's Business Credit (KUR) to help capital for these MSME. KUR is tasked
with facilitating access to banking credit for productive MSMEs but not yet bankable. Difficulties in
capital issues, lead to fundamental problems that affect the process of innovation and transformation of
MSME, also impact on difficulties in marketing, especially in terms of market recognition, pricing,
negotiation, and distribution and sales channels (Lincolin Arsyad, 2003).
 In the same vein, small businesses are usually unable to promote their products through the
mainstream media due to a lack of sufficient demand for their products to cover the costs of promotional
activities. In terms of promotional costs, low-cost media, such as community radio, leaflets or cellular
megaphones, are preferred and tend to highlight sparsely populated areas (Theresia Trisanti, 2001).

Another quite crucial obstacle is the difficulty of raw materials, especially MSMEs in the
processing and manufacturing sectors. This can occur due to the lack of working capital so that all
transactions must be carried out in cash. For example, garment entrepreneurs find it difficult to obtain
thread or soy sauce entrepreneurs have difficulty with raw materials for soybeans, because there are few
offers or if there are, the prices are relatively expensive. On the other hand, production equipment
facilities such as quality control, storage warehouses, distribution tools are often not owned by MSME
entrepreneurs. As a result of this incomplete equipment it has an impact on the limited number, type and
variety of products produced so that the resulting products become static and are no longer able to
compete in the market (Hershkovich and Harper, 2005). Various other obstacles that are still often
encountered in MSMEs are the low quality of human resources, which is reflected in the lack of
development of entrepreneurial behavior, weak regeneration, creativity, discipline, work ethic, and
professionalism. These various constraints make SMEs very vulnerable in facing competition. Experience
shows that the existence of threatened MSMEs even die before coming into contact with the climate of
world trade liberalization.

MSME Strategy and Policy

Appropriate, comprehensive and long-lasting policies and guidelines are needed to expand the role
of MSMEs in the future of the economy and the resilience of the problems it faces to have this positive
effect. In terms of employment and income for the community, it is possible that in the long term, SME
can be present as a pillar of the Realization of the Indonesian Economy free from unemployment.

According to Warjiyo (2004), the successful development of SME

requires Strengthening future strategies, including:
1. Strategy to strengthen the investment climate and business environment that is profitable for
SME industry
2. Strategy for strengthening entrepreneurial and business skills in the MSME sector
3. Strategy for strengthening the financial sector, especially within SME financing banks
4. Strategy for developing various tools (infrastructure) to improve the SME sector the
 According to Kuncoro (2009) shows a two-step strategy that can be suggested for the development
of the SME sector or a demand-pull strategy and a supply-push strategy. The Demand Pull Strategy
involves a strategy of lateral strengthening of demand. This can be done to improve the business
environment, facilitate the acquisition of intellectual property rights (patents), Facilitate domestic and
foreign marketing in this country and offer market opportunities.

Another strategic move is the Supply-push Strategy which includes a supply-side control Strategy.
It can be done according to commodity availability, capital support, technology/machinery/equipment
support and personal skills development.

The same thing was found by the Ministry of Cooperatives and Small and Medium
Enterprises 2005, which presents the main approaches to developing SME in Indonesia:
1) Promotional business environment development strategy

2) Strategy for increasing MSME access to production tools

3) Entrepreneurship development strategy and MSME competitiveness

4) Strategy for more synergy and audience participation

Based on this opinion, it can be concluded that MSME development requires:

a. Strategy to strengthen investment climate and conducive business environment

Strategies to strengthen the investment climate and conducive business environment for the
MSME sector are needed. This strategy is intentional to increase the competitiveness of SMEs. In
implementing this strategy, it must strengthen commitments and policies that are comprehensive
and clear. Starting from government to development in the MSME sector going forward. A good
investment climate is driven by investors or entrepreneurs investing money MSME
Development. So and a good business environment encourages entrepreneurs to be more
motivated to innovate than manufactured products increase the competitiveness of manufactured
products in the market. strategies in developing the investment environment can be implemented
in the form of tax incentives, relatively low wage rates and other incentives. Instead the Strategy
to develop the business environment establishes rules well that support SME extension.
This strategy requires politics in relation to laws and regulations and various
implementation policies that enable SMEs to compete fairly with other economic actors. Good
coordination also requires related components or agencies to be on the board. Supporting
investment climate policies and business environment outside Economic policies must also
always be involved Stress without security support and favorable political conditions is difficult
for SMEs to develop their business. Conditions promoting security and politics provide
opportunities for entrepreneurs to more intensively and more broadly develop their business.
b. Entrepreneur capacity building strategy

The capacity building strategy is very active or active in relation to the development of SMEs
and increasing the competitiveness of their businesses. Entrepreneurs are the most important factor
of production in increasing the competitiveness of SMEs and the competitiveness of the economy
in general. Not a tough and qualified entrepreneur, SMEs find it difficult to understand
competitive skills strengthen Entrepreneurs can focus on management, product innovation, in
marketing, and in relation to investment.
With this strategy, the desire is for UKM human resources to grow. Strengthening
entrepreneurial skills is possible in many ways, one of which is to provide a good education in
management, marketing and product innovation is invaluable. Willingness to learn equips
entrepreneurs with skills and knowledge that are useful for their business. education in terms of
management can involve how to run a business both how to make a business plan and other matters
related to management. internal training. Things that can be combined with marketing are ways to
market products, that is the current market trend via the internet (websites, social media). Therefore,
marketing training is needed via the internet.

c. Strategy to strengthen the financial sector to obtain financing

The strategy that must be used next is the confirmation strategy to finance the SME financial
sector. For now, MSMEs approval continues to very low capital sources with low capacity to
access capital sources. Trade has different effects for SMEs, including: the inability to update
business capabilities according to the needs or needs of society, the difficulty of expanding market
share, the difficulty of improving product quality and news and difficulties improve human
resource skills. In this connection, so far there are still many SMEs that have difficulty getting
hold of getting loans from banks, this is because entrepreneurs are not sufficiently secured and
even entrepreneurs have limited access to bank information further from the side of business
development, SMEs have more information from the financial model of certain goods , and vice
versa Banks also need information about these products it is likely to finance. In this connection
Below is some information on the subject Development of MSME financing.

Based on this information, it seems that financing for the SME industry is currently still low
compared to financing for the large corporate sector. I myself was given 2000 credits. Large
companies reached 79 D44, while SMEs only shared 21% and in loans granted in 2004 the
proportion of large companies reached 83 percent. SMEs received 17% share.The strategy for
strengthening the financing industry for MSME financing can be implemented in the form of
growing financial institutions, microfinance institutions can provide financing for SMEs, intense
microfinance institutions can finance the role development and empowerment of SMEs.
 Krishnamurti (2003) revealed that microfinance, however, can be synonymous with making a
positive contribution. Allocation of resources, promotion of better marketing and technology
implementation. More than that, microfinance contributes to the development of cross-economy
systems, integration of financial markets, the range of services is growing. This is currently not
possible for traditional banks. The same was also expressed by Wijono (200 The availability of
financial resources is limited for SME, especially entrepreneurs, especially small and micro
enterprises (UKM). Formal financial institutions such as banks, their common sense relies on
unofficial sources. To implement this strategy, appropriate policies are needed regarding the
development of financial institutions that can finance the SME sector. policy implementation It is
about providing comfort to applicants for permits Establishment of financial institutions Set
appropriate rules when applying for business financing for SME.

d. Simple delivery strategy Licenses, legal entities and patents (APP/properties)

Moderation strategies for obtaining permits, legal entities and patents (APP / property rights)
should be offered to SMEs. There must be a commercial license issue given as advice and to give
encouragement to the development of their SME business. It also makes finding a legal person's
job easier because a legal person will have a big impact on the sustainability of SME. SME that
already have a legal business will have legal authority regarding contract closings, credit
applications and other transaction activities. So far, most SME do not have the status of a corporate
legal entity. Intellectual property must be reserved for SMEs that have created other products or
brought something new that was never invented or Bringing product innovation to market is
unique. This is important motivation for small business owners to continue to grow commercial
production results. In the long-term it will increase internal competitiveness overcoming all
challenges with competition. So the role of the middle class Economy will be higher profits
Unemployment All the time to do it right about intellectual property rights (IPR) even very
difficult care must be taken significant costs and takes a long time. In this case, the affected parties
must politicize in the right way so that SMEs can easily get the right to do so with intellectual
property rights (IPR).

Applicable policies related to licensing, legal entities and patents (registration / intellectual
property rights) legal decisions or regulations that provide for SMEs to take care of licensing, legal
entities Patents. Licensing and Administration Legal entities also have to do it in a door. In
addition to the politics that can be applied, incentives for SME are also time incentives and fees for
obtaining permits, legal agencies and patents (APP).
e. Moderation strategy Marketing

Moderation strategy SMEs really need marketing as they grow their business. Provision of
internal marketing services in the form of marketing promotions such as transportation,
promotions and media exerts a great effect on product uptake. So many of the products produced
by SMEs are perfectly absorbed or not well-known, this is about skills in marketing SMEs that
are still low. SMEs can really use the internet as a means of conducting marketing activities into
internet marketing for the development of economic activities now. It is important to take
advantage of this opportunity that employers can market their products either through
websites, social media (Facebook, Twitter, Instagram), blogs and other services available on
the Internet.

This strategy provides an opportunity for entrepreneurs to present their products to domestic
and foreign consumers, so that the products produced by consumers can greet most SME.

f. Internal strategy for procurement of raw materials

The strategy of finding raw materials for the production process is important for the continuity
of SME businesses. No stock of raw materials is quite difficult to create stability in the production
process. this strategy must be offered somehow more easily obtainable supply of raw materials
Cheap raw materials, good materials from raw materials originating from within the country and
raw materials imported from foreign countries. accessible cheap raw materials increase high
productivity, e.g. In the long term, SMEs may be faced with increasingly fierce competition.
Policies that can be implemented belong to the inner circle of providing tax incentives in the form
of import duties on raw materials imported from abroad and developing a prohibition policy for the
export of local raw materials.
In addition, entrepreneurs who produce certain goods must be able to produce raw materials as
alternative supporting materials when goods are more expensive and scarce. In this case, it is
necessary that the government can carry out research related to alternative raw materials.

g. Strategies for help or advice and guidance

No exception strategy refers to this with the help or advice and guidance of SMEs. assistance
or advice and guidance in the form of support for the production process, marketing and other
activities of UKM. assistance and guidance to assist UKM in increasing productivity and
competitiveness. All this time offering help or advice and guidance to actors from parties included
in the inner circle. However, SMEs are still very low compared to providing assistance and
guidance Farmers In the agricultural sector at the district level each village is a farmer so various
 agricultural problems will be resolved immediately in different MSME sectors, there is assistance
or advice and the relevant Department is responsible for counseling living in the area . In this
sequence slow down the process of assistance or advice and guidance of SMEs. As a result, the
problem is that you can't be directly in UMKM to win.

h. Infrastructure development strategy

The next strategy is the development strategy Support tools (infrastructure) to improve the
MSME sector. This strategy is very important because it plays a very large role in the development
of the MSME sector in the market mechanism. g. Strategies for help or advice and guidance The
development of SMEs is successful when they have the opportunity to support existing
infrastructure. Road services make it easy Production sharing, place Telecommunication is
accelerated Access to information and electricity Supports smooth production. There are still
obstacles to the development of the infrastructure because the right policies are needed to support
MSME development. Infrastructure development policies can be in the form of routine repairs to
transportation and infrastructure facilities (roads, ports, airports).

This practice speeds up the delivery of production results. Another guideline for
infrastructure development is in the form of institutional development to accelerate
telecommunications access to information in the form of building an internet network in every
SME center with large capacity. This facility did not exist before. So, for the development of
the MSME Product market, this cannot be done at most with website development. One of
them is an internet network for MSME centers, the best choice for product presentations
produced by SMEs. About the Internet this product is produced by SMEs from the general
public.

MSME Problems at Warung Ijo Bu Nur (Warjo)

The problem faced by Small and Medium Enterprises (SMEs) in Indonesia is not only a matter of
capital. The President of the Indonesia Marketing Association (IMA) for the 2013-2015 period,
Muhammad Awaluddin, revealed that the main problem faced by SMEs in Indonesia to become
independent and advanced is the factor of business knowledge and marketing. There are many SMEs with
minimal ideas and capital, but with a touch of knowledge, their business is growing. Understanding of
knowledge does not mean passing the level of formal education.
 Every UMKM certainly has its own problems in its field. Based on the interviews that have been
conducted by our team, there are several problems that occur at the green shop bu nur, namely:
1. The price of basic commodities is rising and it is difficult to get this because of the
ongoing inflation.
2. Consumers who are impatient when queuing so that the atmosphere is not conducive.
3. Not only impatient consumers, ojol drivers also have the same problem, namely being
impatient to queue which results in giving this food stall a bad rating as a result, the
green food stall, bu nur, has to shut down.
4. Employees who take sudden vacations result in difficulties for the shop in handling if
there is a spike in purchases but a shortage of manpower, because the wage system in this
food stall is daily.

Even though they have a large contribution to development in Indonesia, MSMEs also have
several problems that occur, including:
1) Capital Problems

The problem most frequently encountered by MSMEs is limited capital. MSME actors
may have many business ideas to develop their business, but must stop because there is no
additional capital. If traced back, many MSMEs have difficulty obtaining additional capital from
financial institutions due to the many requirements that have not been met. This is the same with
the results of a survey conducted by Pricewaterhouse Coopers, in which 74% of MSMEs in
Indonesia do not have access to financing. Technological developments provide new
solutions for MSME actors in obtaining additional capital. Call it the presence of financial
technology (fintech) through a fundraising system or what is known as crowdfunding. This
new way of funding is a challenge for MSME actors in convincing the general public to fund
their businesses. This capital problem is also still related to the problem that occurred at
Warung Ijo "Bu Nur" which is quite difficult to get staples because the price is rising.

The easiest solution that can be done to overcome the lack of capital is that MSME
players can now get additional capital through a fundraising system presented by financial
technology (fintech). This fundraising is known as crowdfunding. There are two types of
crowdfunding, namely reward and equity. Reward is a fundraising system in the form of a
sponsor in which you can give rewards according to funding from donors. Meanwhile,
equity is a fundraising system based on investment in shares in exchange for profit sharing.
2) The Difficulty of Recording Employee Attendance Lists

Manually There are many employees who are involved and must monitor employee
performance. One way to monitor employee performance is to use an attendance system.
Unfortunately, the attendance system currently used by MSME actors still uses manual methods
which can certainly reduce the level of effectiveness in processing data. The problems that occur
at the green shop "Bu Nur" are employees who often take sudden holidays, this is also still
related to the theory of the problem above.

3) Difficulties in Distributing Products

The next MSME problem is the distribution of goods. So far, most SMEs have
always lacked channels in terms of distributing their products. Most of them also only
focus on distributing goods to several partners they only know. This method is of course
still very simple and the level of reach is not yet wide. This problem also occurs at
Warung Ijo "Bu Nur" which is that there are still difficulties in distributing their products
through online media such as go food and others.

There are so many MSME that can make quality and competitive products but
cannot survive because of the difficulty in marketing the products they produce. As a
result, MSMEs cannot increase their sales and production capacity. Perpetrator businesses
can also create company and product profile websites to help improve business reputation and
so that businesses can be found by potential customers. The solution that can be done to
overcome marketing problems is to attend exhibitions that are large enough to develop
networks and acquire new customers. Business actors must actively participate in product
exhibitions held by various government, private and community institutions. This method is
useful for expanding the market reach of an MSME. In addition, they can collaborate with
various merchants/outlets that can help market products in their stores. That way, product
marketing can be broader and reach a broad market as well.

4) Not Optimizing Online Marketing

The fourth problem is basically related to the third point, namely the difficulty in distributing
goods. One of the factors causing the distribution of goods to be less widespread is because
entrepreneurs have not been able to do their marketing online. Some of them may have already
marketed their products through various online media, such as social media, marketplaces, forums,
etc. However, in practice it is still far from optimal. As a result, the results of what they get are less
than optimal. This problem is also related to the previous problem, namely not optimal online
marketing. This problem arises because online motorcycle taxi drivers are impatient and also
careless in giving ratings in online media.
 This problem often escapes the attention of MSME entrepreneurs. Not many people are
aware of the importance of branding for their products and their business. Thus, most business
actors only focus on selling, selling, and selling, without thinking about the brand quality of their
products. In fact, maintaining the quality of branding is very important in efforts to grow the
MSME business. With good quality branding, a product will be easier for audiences to remember.
So the opportunity for sales is even greater. The solution is, businesses can do a SWOT (Strengths,
Weaknesses Opportunities, Threats) analysis of your product. This means that business actors can
analyze the strengths, weaknesses, opportunities and threats to the product. From the results of this
analysis, business actors can try to find the things that stand out the most and differentiate their own
products from other products. Once found, business actors try to consistently highlight product
characteristics as promotional material. How is consistency in maintaining the characteristics of this
product that will determine how the quality of the brand or brands.

RESEARCH METHODS

This research conducted in “Warung Ijo Bu Nur” whivh is located Way Hui, Jati Agung. This study
uses a qualitative method. The data collection method used is qualitative, namely collecting data in the
form of words. The point is to utilize library research, namely the process of searching through various
existing literature, research, or studies related to the research being carried out. Whereas the key to
unlocking everything that helps solve problems in research. Related sources include: encyclopedias,
journals, books, and other scientific works.
According to Moleong (2005: 6), qualitative research is research that intends to understand
phenomena about what is experienced by research subjects such as behavior, perceptions, motivations,
actions, etc. holistically, and by means of descriptions in the form of words and language, in a natural
context and by utilizing natural methods.
The data used in this study is primary data that is done through interview techniques. The primary
data taken in this study is data collected using a list of questions that have been arranged systematically,
which include the following information:
a) Location (Kalurahan, Kecamatan)
b) Age of the company (since when the business started in the location concerned) total
manpower
c) Number of loans received from banking/financial institutions
d) Sales turnover
e) The amount and type of raw materials used
f) Coaching ever received (technical, management, marketing, promotion, capital assistance)
g) Aspects of production (marketing reach and market prospects)
h) Business legality aspect i. Factors influencing business development
RESULTS AND DISCUSSION

The results and discussion section is the result of an analysis of MSME Problems: Strategy and
Policy through observation and interviews with one of the employees at Warung Ijo Bu Nur (Warjo)
located Way Hui, Jati Agung. This research was conducted to answer the formulation of the problem.
Researchers have also conducted an analysis of the MSME problems that exist in Warung Ijo Bu Nur
(Warjo), namely in the form of rising prices of basic commodities and it is difficult to get this on the basis
because of the ongoing inflation; Customers who are impatient when queuing so that the atmosphere is not
conducive; It's not just consumers who don't patient ojol drivers also have the same problem, that is, they
can't wait in line which results in giving this food stall a bad rating as a result, the green food stall, bu nur,
has to shut down; Employees who take sudden vacations result in difficulties for stalls in handling if there
is a spike in purchases but a shortage of manpower, because the wage system in this food stall is daily.
From the MSME problems at Warung Ijo Bu Nur (Warjo) above, it can be discussed that:

1. The first internal problem is capital

This problem is one of the problems that are still faced by entrepreneurs because most of
these entrepreneurs use personal capital. The findings in the field show that the driving force for
MSMEs only comes from their own capital, there has been no assistance from the government or
loans from banks. However, the information on sources of capital options above has not yet
reached the MSMEs movers, so that some MSMEs movers who need this information are still
burdened with capital constraints. In addition, information on sources of capital is actually
available from related agencies and the community. However, not all MSMEs actively coordinate
with agencies and the community. One of the interesting things is that the community acts as an
intermediary between MSMEs and funding institutions based on the trust factor. One aspect of the
institution's consideration is togetherness in the community. Positively, the requirements that are
usually classified as complicated for MSMEs are changed to simple ones with community
intermediaries. However, this opportunity has not been received by all communities equally
because of the unclear flow of information. In addition, MSME drivers have not been able to
manage capital funds properly, so that information on good management of the flow of funds is
still needed by MSME drivers. Fund management is needed for daily activities, research and
innovation as an effort to further develop the business. This is related to the quality of human
resources in financial management, labor, marketing, and so on.
2. The second internal problem is inadequate human resources in terms of skills, distribution of
performance, and number of employees.
For human resources at Warung Ijo Bu Nur, one of them is the number of employees, which
number only 6 people and on average are relatives and the surrounding community. Employees from
family members when work performance does not meet quality standards, it creates obstacles. There
are also employees who take work home which can result in uncertainty in the production process.
Employees who work in the workplace will be controlled by MSME drivers in the production
process so that errors can be identified and reduced. In addition, employees who work at work can
reduce distractions that may arise when working at home, such as cleaning the house or relaxing.
Another obstacle is marketing and finance included in skills. There are several MSME movers who
have implemented and started marketing their products using technology and the internet, for
example social media Instagram and Facebook. Both of these social media are easy to learn and can
be operated simply using a smartphone. However, not all MSMEs movers have found the right way
to market their products. Some MSMEs promoters state that direct activities in the form of
exhibitions really help MSMEs meet new markets, but often the rental price is very expensive so
that MSMEs are unable to participate.

3. The third internal problem is infrastructure, for example the technology used in production
activities.
As explained above, there are problems in technology, namely the lack of promotion via
social media: such as Facebook, Instagram, WhatsApp and so on. In addition, MSME movers must
master and ensure the types of media and technology to be used. This is done so that MSME
movers can recognize trends or patterns of business actors when accessing information. Media
preference will increase the success of related capability upgrades. Even so, various media must
still be studied. This capability must be maximized to expand the use of technology in increasing
the productivity of business actors. Then, MSME movers must be able to find, sort, and select
information so that it is appropriate. The ability to search for information related to the strategy of
finding the information needed by using certain keywords. Keywords are descriptions of important
or main words related to information needs. In addition to words, punctuation can also be included,
for example quotation marks, plus signs, underscores, and so on. This looks simple but can save
time in getting search results for information, for example in quotation marks which function to
filter information according to keywords and focus on certain subjects. If you do not use the
information search symbol when searching for information, then all the information that is not
needed will appear, thus spending a lot of time. After getting alternative information,
 MSME movers then sort the information by reading the information one by one. After that,
MSME drivers categorize information that can be used according to the problem at hand. This is
done to make it easier for MSMEs to reuse this information so they can save time searching for
information in the future.

Information that has been categorized is then selected which one is the priority. At this stage,
the information that has been obtained is determined whether it can be implemented or are there other
aspects that are considered before using the information. All of these processes will be carried out in
the utilization of information to make it more efficient. In addition, MSMEs activators can more
thoroughly analyze the information obtained in order information needs in the future to have good
documentation. The third stage, MSME drivers have expertise in implementing information. The
correct understanding of information will affect how information is implemented, including
information search, categorization, and so on. Then the success rate of information implementation is
also determined by this ability. When the process of implementing information requires careful
observation by superiors or third parties to ensure proper implementation. If the translation of
information is not appropriate, there will be obstacles in developing human resource potential and
business productivity. Increasing the ability of MSMEs to implement information will affect the
improvement of decision-making abilities. In the previous process, it is a stage that helps in
determining the solution to solving the problem at hand. MSMEs in the process of implementing
information will get solutions that are repeated and then stop if the benefits have been felt.
Furthermore, MSME drivers will decide on solutions that have an impact or fit the needs and need
activities to maintain the quality of each performance.

The external factors come from the MSMEs themselves.

1) In our opinion, the Government has not been optimal in developing MSME at Warung Ijo
Bu Nur (Warjo) even though the government is a place for the community to rely on. The
government in making service programs for MSME drivers has not been in accordance
with the needs of the community.

2) The second external factor is from the community

The community acts as a mediator between the MSME movers and the government and is
expected to provide optimal benefits for the MSME movers. However, the UMUM drivers
still feel that there is a gap in opportunity and the quality of existing SMEs still needs to be
improved.
 3) The third external factor is consumer response.

Consumers have diverse needs in Indonesia which create their own challenges which are
quite challenging, for example economic factors, preferences, quality, and so on that
influence the development of MSME.

CONCLUSION

Micro, Small and Medium Enterprises (MSMEs) have various definitions with the formulation of small
businesses under various names, for example (1) the Central Bureau of Statistics (BPS) uses the criterion of
the number of people employed; (2) Ministry of Industry, using financial criteria such as capital investment
for machinery and equipment as well as investment per worker; (3) Bank Indonesia, using financial criteria,
such as wealth and turnover; (4) The Ministry of Trade uses the criteria for maximum active capital for
trading businesses; (5) KADIN (Chamber of Commerce and Industry) uses capital criteria, which are adjusted
to economic sectors.

According to law no. 9 of 1995 concerning Small Businesses (1995), in more detail states that small
businesses are "Businesses that meet the criteria: have a net worth of at most two hundred million rupiah,
excluding land and buildings where the business is located, or have annual sales proceeds of at most one
billion rupiah, owned by Indonesian citizens, is independent, is not a subsidiary or branch of a company that
is owned, controlled or affiliated either directly or indirectly with medium or large businesses, and is in the
form of individual businesses, business entities that are not legal entities, or business entities that legal entity,
including cooperatives.

Furthermore, there are MSME Strategies and Policies. Appropriate, comprehensive and durable policies
and guidelines are needed to expand the role of MSMEs in the future of the economy and the resilience of the
problems they face to have a positive effect. The same thing was found by the Ministry of Cooperatives and
Small and Medium Enterprises Enterprises 2005, namely presenting the main approach to developing SMEs in
Indonesia, namely the Promotional Business Environment Development Strategy; Strategy for increasing
MSME access to production tools; Strategy for developing entrepreneurship and MSME competitiveness and
strategy for more synergy and audience participation.
 In this connection, so far there are still many SMEs that have difficulty getting hold of getting loans
from banks, this is because entrepreneurs are not sufficiently secured and even entrepreneurs have limited
access to bank information further from the side of business development, SMEs have more information from
the financial model of certain goods , and vice versa Banks also need information about these products it is
likely to finance.

SMEs that already have a legal business will have legal authority regarding contract closings, credit
applications and other transaction activities. So far, most SMEs do not have the status of a corporate legal entity.
Intellectual property should be reserved for SMEs that have created other products or something, bring
something new that has never been invented or bring innovative products to the market that are unique.
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