1. Impact the Financial Crisis for SMEs in Indonesia Ign. Wahyu Indriyo Bina Swadaya

2. Indonesia Micro Entreprises & SMEs Composition Large Scale 4,527 units 2,520,707 employees Medium120,253 units 4,720,006 employees Small 2,017,926 units 9,970,664 employees Micro 47,702,310 units 77,061,669 employees Source : BPS – Statistics Indonesia 2007

3. Share to GDP (2007)

4. Bina Swadaya Development of Microfinance : 13 MFI Branches, 5 Rural Bank, 12 koops Society Empowerment : Empowerment Community based organization (Self Help Groups), Community Health, and Sanitation, Environment/Agriculture, Employment. Agribusiness Development Services: center for agriculture information and offering various services such as agricultural library, training, CD and VCD, Agriculture products and marketing accessories. Communication Media for Development : publishing agriculture books, skill books, health, language, management, and applied technology.

5. Understanding Financial Crisis 'Financial global crisis is difficult to be understood. If the situation is crisis, why many consumers still want to buy our product ? Domestic market still give good prospect' (a handicraft businessman in Klaten, Central Java). The phenomena of financial crisis for micro enterprise & SMEs : Increasing of production cost & living cost (fuel price, imported raw material price – flour mills, pesticide, food, transportation, etc -)

6. Impact of Financial Crisis for Micro & Small Medium Entreprises Increasing of production cost : - Imported raw materials (flour, corn, wheat, soybean, etc) - Imported machine & production equipment Decreasing of demand : handicraft ( 50%), palm, dairy milk. Unregulated market create more vulnerable condition : salt trader (imported salt). Politics of Food security Vs term of trade for more than 38 million farmer households.

7. Food Jewelry & Accessories Fisheries Handycraft Balm Leather Product Medical Equipment Office Equipment Rizoma Oil Herbal Indonesia - 10 potential product dominated by micro enterprises & SMEs, (high number of employees, creativity, cultural and traditional wisdom, domestic & international market) Sources : BPS – Statistics Indonesia 7 Export 2007 & Target 2008 (US $ Billion)

8. Strategy to survive : Substituting the raw materials. Lessen quality & size of the product. Lessen employee. Innovation to create value added → creative industry

9. Recommendation Regulating and facilitating to protect micro & small, medium enterprise. Indonesia case : a) The strength of local (domestic) market → 70% GDP = households consumption. b) Creative economy = 8% GDP and absorb 7.4 million employees. Main creative industry in Indonesia : Fashion, art & handicraft, television, radio & cinematography, print & publishing, computer & software, interactive game, music & showbiz.