The Covid 19 and the impact to SMEs

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At the beginning of 2020, precisely in March, Indonesia was hit by the Covid-19 pandemic and resulted in a large number of Indonesian who were positive for Covid-19. There was a boom in positive cases of Covid-19; due to the large number of people affected by the Covid-19 virus, the government decided to impose Large-Scale Social Restrictions (PSBB). The enactment of PSBB resulted in restrictions on community activities such as malls, Small and mid-size enterprises (SMEs), offices, and schools were closed, including trading activities. These social restrictions resulted in reduced trade transactions and decreased revenue for large companies and SMEs. As a result of the decline in Revenue for SMEs, this creates a dilemma for SMEs owners because they have to think about how to run their business and make several efforts to maintain their business conditions. Usually, business owners take several efficiency measures to reduce operational costs, such as reducing the number of workers, employee working hours, and the production of goods/services, marketing costs, etc. Other obstacles faced by SMEs are finding raw materials, repaying loans, capital injections from investors, and declining customers. As a result of reducing employees, it will impact increasing the number of unemployment. It will result in the Indonesian economy being in a minus number considering the very high level of labours absorption in SMEs.

The COVID-19 pandemic in Indonesia resulted in a decline in the economy due to restrictions on community activities. This forces the government to hold an incentive program for large companies and SMEs. The program given by the Indonesian government is to carry out the National Economic Recovery (PEN) program with a budget of Rp. 699.43 trillion. In addition, the government is also exempting tax discounts for business actors and last, the government I also holding a vaccination program to prevent the public from contracting the COVID-19 virus. By carrying out the vaccination, it is hoped that later, the community can carry out everyday activities as before, then open public access to do activities outside the home with some rules that must comply with health protocols, for example, wearing masks, avoiding crowds, wearing and carrying hand sanitisers, washing hands, and if you want to buy food outside you must take away or delivery with Ojek Online. With these government programs, it is hoped to improve the Indonesian economy, especially for SMEs.


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