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  • Access to Trade and Growth of Womens SMEs in APEC Developing Economies

    Evaluating the Business Environment

    in Indonesia

    August 2013

  • The Asia Foundation HEADQUARTERS 465 California Street, 9th Floor San Francisco, CA 94104 USA Tel: (415) 982-4640 Fax: (415) 392-8863 [email protected] JAKARTA PO BOX 6793 JKSRB Jakarta 12067 Indonesia Tel: +62 (21)72788424 Fax: +62 (21)7203123 [email protected] asiafoundation.org

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    Acknowledgements This report was a collaborative effort between The Asia Foundation and its partners representing the work and insight of many individuals. The Asia Foundation especially thanks the 150 Indonesian entrepreneurs who generously answered survey questions and helped us develop a better understanding of the challenges and needs of womens firms. The principal authors of this report were The Asia Foundations Research Coordinators, Nina Merchant-Vega, Associate Director, Economic Development; Kate Bollinger, Program Officer, Womens Empowerment Program; and Laura Seaman, Junior Associate, Economic Development. Authors from The Asia Foundations staff in Indonesia include Erman Rahman, Director of Local and Economic Governance Programs; Hana Satriyo, Director for Gender and Womens Participation; Mochamad Mustafa, Program Officer; and, Novi Anggriani, Program Officer. Important contributions were also made by Vronique Salze-Lozach, Director, Economic Development, in Thailand; and, Elizabeth Robinson, Intern, Womens Empowerment Program, in Washington, DC. Administrative support in Indonesia was provided by Noni Huriati, Program Assistant. Field research in Indonesia was conducted by the Centre for Strategic and International Studies (CSIS), Jakarta, including researchers Titik Anas, Deni Friawan, Pratiwi Kartika, and Dandy Rafitrandi. The patient and thorough work of the field enumerators and field supervisors made the survey possible.

    We are also grateful to the following individuals for their valuable inputs: I Wayan Dipta, Deputy Minister for SME and Cooperative Resource Research, Ministry of Cooperative and SME; Nurul Widyaningrum, Executive Director, Center for Social Analysis (AKATIGA); and Nina Tursina, Division Head of SME, Women Entrepreneurs, Women Workers, Gender and Social Affairs, the Employers Association of Indonesia (APINDO).

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    Contents

    Acknowledgements ............................................................................................................................... 1

    I. List of Figures ...................................................................................................................................... 4

    II. List of Tables ...................................................................................................................................... 5

    Executive Summary ............................................................................................................................... 6

    CHAPTER ONE: Barriers to Women in Business in Indonesia ................................................................ 9

    1.1 Purpose ........................................................................................................................................ 9

    1.2 Background .................................................................................................................................. 9

    1.3 Indonesia in Relation to Other APEC Economies ....................................................................... 10

    CHAPTER TWO: Research Overview .................................................................................................... 12

    2.1 Research Methodology .............................................................................................................. 12

    2.2 Sample Characteristics for Indonesia ......................................................................................... 13

    CHAPTER THREE: Management and Operational Capacity ................................................................. 15

    3.1 Management and Operational Challenges ................................................................................ 15

    3.1.1 Employee Hiring and Training ............................................................................................. 15

    3.1.2 High Rates of Profitability and Growth ............................................................................... 16

    3.2 Access to Finance ....................................................................................................................... 17

    3.2.1 Interest Rates and Access to Capital ................................................................................... 17

    3.2.2 Securing Collateral and Filing Credit Applications .............................................................. 18

    3.3 The Role of Networks ................................................................................................................ 20

    3.3.1 Businesswomen in Indonesia are More Networked than Men .......................................... 20

    3.3.2 Hiring Patterns .................................................................................................................... 22

    3.4 Business-Related Technologies .................................................................................................. 22

    Chapter 3 Key Recommendations ................................................................................................... 23

    CHAPTER FOUR: Government Support ................................................................................................ 24

    4.1 Indonesian SMEs Perceive a Lack of Government Support ....................................................... 24

    4.1.1. Women Business Owners as Consumers of Government Services .................................... 26

    4.2 Access to Information ................................................................................................................ 27

    4.2.1 Access to Land Titling Information ..................................................................................... 27

    4.2.2 Access to Business Licensing Information ........................................................................... 28

    4.3 Corruption and Informal Payments ........................................................................................... 29

    4.4 Safety Concerns ......................................................................................................................... 31

    Chapter 4 Key Recommendations ................................................................................................... 31

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    CHAPTER FIVE: The Social Environment .............................................................................................. 33

    5.1 Family Responsibilities and Womens Entrepreneurship .......................................................... 33

    5.1.1 Traditional Views of Womens Role in Family Life .............................................................. 33

    5.1.2 Responsibility for Childcare ................................................................................................ 35

    5.1.3 Marital Status ..................................................................................................................... 36

    5.2 Education and Business Owners in Indonesia ........................................................................... 38

    5.3 The Influence of Role Models .................................................................................................... 39

    5.3.1 The Influence of Relatives ................................................................................................... 39

    Chapter 5: Key Recommendations .................................................................................................. 40

    CHAPTER SIX: Conclusions ................................................................................................................... 42

    APPENDIX ONE: Methodology ................................................................................................................. i

    A1.1 Quantitative Survey ..................................................................................................................... i

    A1.2 Focus Group Discussions ............................................................................................................ ii

    A1.2.1 Semi-Structured Interviews ................................................................................................ ii

    A1.2.2 Case Studies ........................................................................................................................ ii

    APPENDIX TWO: Basic Sample Characteristics ...................................................................................... iii

    A.2.1 Firm Ownership ........................................................................................................................ iv

    A.2.2 Firm Age ................................................................................................................................... iv

    A.2.3 Size of Firms ............................................................................................................................... v

    A.2.4 Legal Status of Firms ................................................................................................................. vi

    A.2.5 Sector .........................................................................................................