The Untapped Potential of SMEs in Indonesia

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The team at UOB FinLab has witnessed a very exciting and fruitful third quarter of 2023. Earlier in September, we launched UOB FinLab in Indonesia which marks our fifth in-market launch across ASEAN.

Our regional ecosystem network is now stronger than ever. Our presence in Singapore, Malaysia, Thailand, Vietnam and Indonesia will further enable SMEs to tap onto our cross-border network to drive digitalisation and sustainability initiatives.

Indonesia is a market of strategic importance for us and we see immense opportunities for UOB FinLab to support the business transformation goals of SMEs in the country. Amidst the backdrop of a challenging macroeconomic climate, SMEs in Indonesia are optimistic for the future and are planning to equip themselves to thrive in an ever-changing economic environment.

Navigating the challenging macroenvironment for SMEs in Indonesia

The combination of sky-high inflation and ongoing geopolitical tensions have caused businesses around the region to witness rising supply costs – making it challenging for SMEs to compete and maintain profits. This is causing Indonesian SMEs to feel the inflation pinch with nearly one in two businesses in Indonesia shifting its focus on cost cutting to address inflation, according to a study by UOB.

To combat inflation, companies of all sizes are turning to digital solutions as a way to streamline business operations through digitalisation – enabling greater productivity, increased customer outreach and data insights.

The government in Indonesia understands the importance of digitalisation and has rolled out innovative initiatives such as the The MSME Digital Technology 4.0 Adoption initiative, to empower SMEs to enhance their competitiveness and drive economic growth.

While digitalisation opens up a multitude of opportunities, it comes with its challenges.

Digitalisation can intensify competition as SMEs may have to compete with larger corporations that have more resources to invest in digital solutions and cutting-edge technology. This can make it difficult for smaller businesses to gain market share.

In order to stay competitive, SMEs have to incorporate digital solutions to open new opportunities. However, many SMEs in Indonesia and the wider region may not have the necessary digital skills and expertise to effectively leverage digital tools and platforms. While many players are offering coaching and educational resources, digital training programs are often generic and not tailored to an SMEs business operation.

To address these challenges, UOB FinLab’s strategy is to support the unique needs and circumstances of different SMEs in Indonesia. To achieve this, we will continue to strengthen our collaborative ecosystem where SMEs can work with other SMEs, government agencies and key industry stakeholders in Indonesia and ASEAN – enabling players to exchange knowledge, resources and best practices to navigate an ever evolving digital world.

Positive attitude, positive outlook

Despite a challenging macroenvironment, Indonesian companies remain positive and bullish. According to a study by UOB, 90% of Indonesian SMEs and Large Enterprises are optimistic about their business and are planning to take the necessary steps to ensure they are prepared to navigate the changing economic environment.

Adopting digital solutions to automate processes and improving customer experience are their top actions to drive growth. Additionally, in the next three years, businesses in Indonesia are prioritising to digitalise their business to raise efficiency (43%), tap into new customer base (40%), develop new sources of revenue (36%), reduce cost (34%) and re-skill or up-skill existing talent (27%).

To support the drive, optimism and potential of SMEs in Indonesia, the launch of UOB FinLab in Indonesia will enable Indonesian businesses with the tools, knowledge and resources needed to increase the competitiveness of their digital products and services.

Digitalisation programmes specially tailored for Indonesia such as UKM SUKSES (Sistem Usaha Kreatif dan Solusi Ekonomi Sejahtera) was launched in September 2023 in conjunction with UOB FinLab’s expansion into Indonesia. The two-day programme focused on helping Indonesian SMEs successfully digitalise by equipping them with knowledge, strategies and practical tips for adopting digital technologies in e-commerce, digital marketing and logistics.

Ainul Marliah, Founder of Oncelicious, a participant from our Indonesia programme UKM SUKSES mentioned that “she was previously comfortable with manual book-keeping processes, but the programme allowed her to understand the numerous benefits of streamlining business operations through digitalisation. She foresees that “SMEs in Indonesia will continue to understand the importance of digitalisation and incorporate digital tools into everyday operations.”

Being present across ASEAN, Indonesian SMEs can leverage UOB FinLab’s regional ecosystem for knowledge sharing and business matching. Hendry Tju from CV Nore Inovasi, another participant from our UKM SUKSES said: “Through UOB FinLab’s digitalisation programme, I have managed to receive resources to guide some of my business’ digitalisation processes and have been introduced to new prospects in different industries.”

To bring this extensive network one step further for businesses in Indonesia, UOB FinLab signed Memorandums of Understanding with ecosystem partners such as the Indonesian Public Service Agency for Small to Medium Enterprises and Cooperatives (SMESCO), the Indonesian Young Entrepreneurs Association (HIPMI JAYA), and the Employers’ Association of Indonesia (APINDO) to build an interconnected, supportive and vibrant ecosystem for local businesses to grow digitally and sustainably.

Finlab 2 - The Untapped Potential Of Smes In Indonesia
From left to right: Mr Hendra Gunawan, Country CEO, UOB Indonesia (UOBI); Ms Marianne Tan, Programme Director, UOB FinLab; Ms Novianty Widjaya, Digital Engagement and FinTech Innovation Head, UOBI; Mr Sona Maesana, Chairman, Himpunan Pengusaha Muda Indonesia Jakarta Raya (HIPMI JAYA); Mr Edisono Limin, Head of Channels and Digitalisation, UOBI; Ms Shinta Widjaja Kamdani, Chairwoman, Asosiasi Pengusaha Indonesia (APINDO) (The Employers’ Association of Indonesia); Ms Janet Young, Managing Director, Head of Group Channels and Digitalisation, Head of Strategic Communications and Brand, UOB; Mr Leonard Theosabrata, President Director, Small & Medium Enterprises and Cooperatives (SMESCO); and Mr Shannon Lung, Head of UOB FinLab.

What’s next for Indonesian SMEs?

Digitalisation will enable Indonesian SMEs to uncover new, endless opportunities. In the next one to three years, UOB FinLab sees strong interest from Indonesian businesses to expand overseas with nearly seven in 10 businesses stating they are motivated to expand overseas to generate more revenue growth. Southeast Asia, especially Singapore, Malaysia and Thailand, will continue to be a hot destination for business expansion due to its proximity and promising business outlook. With any business expansion, it is always difficult to find the right local partners to work with in a new market. Another trend that will take precedence in Indonesia is the need for ESG adoption. Incorporating sustainability enables companies to preserve the planet for future generations while attracting investors, improve their reputations and improve collaboration with larger corporations. However, only 47 per cent of businesses have implemented sustainability practices in their business. Arfan Alanda, CEO of Jejakin, one of the participants of UOB FinLab’s Greentech Accelerator programme in 2022, mentioned that: “ESG initiatives are still a new concept in Indonesia. Many people understand ESG from a high level but do not know how to embed ESG strategies into its core business. There needs to be support from all public and private sector players to truly drive the adoption of ESG practices in Indonesia.”
Jejakin App - The Untapped Potential Of Smes In Indonesia

Users can make use of the JejakinApp to track their carbon footprint and see how they can make a difference by contributing to various green projects. 


UOB FinLab is committed to the Indonesian market, and we promise to accelerate the digitalisation and sustainability efforts of local SMEs through our regional ecosystem, resources and tailored workshops. As we head into the end of 2023, we look forward to witnessing the digital and sustainable transformation of Indonesian SMEs.

To learn more about UOB FinLab in Indonesia, click here.

Online programme

Start Smart Programme

Designed for business owners to enhance their digital capabilities through practical learning, this programme takes businesses to the next level.

Online programme

Start Smart Programme

Designed for business owners to enhance their digital capabilities through practical learning, this programme takes businesses to the next level.

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