This study was conducted to evaluate KOMPAK’s intermediary pilot. The scope of the evaluation covers two things, namely related to the implementation of the field trial and its results, as well as potential/indications of the sustainability of this model at the local government level. The evaluation was carried out on five of the 14 commodities/trial locations, namely in West Aceh (water hyacinth handicraft), Pekalongan (batik), Trenggalek (biopharmaceuticals), Pacitan (mokaf flour), and North Lombok (tourism village).

Since the New Order era, micro, small and medium enterprises (MSMEs) have always been recognized as an important part of the economy and business order in Indonesia. With all the efforts that have been made and the economic shocks that have occurred, small businesses remain a key factor in the Indonesian economy and remain the main source of absorption of our workforce. MSMEs contribute 60.34% of the total national Gross Domestic Product (GDP) and absorb 97% of the total workforce in Indonesia.[1] With this contribution to GDP and employment, MSME development is also seen as the key to poverty alleviation.

The government has launched various programs and assistance for MSME development, especially in the form of training or capital. This input side approach assumes that the market is a neutral entity. Therefore, to be able to be involved in a market like this, MSMEs need to be assisted with an assistance framework that is oriented towards bridging businesses so that there is a change in market access for MSMEs. Once the real market is clear and accessible, we can see and correct deficiencies on the input side and the organization of production.

With that argument in mind, KOMPAK has conducted a trial of intermediary development for business groups, especially in the UMK (Micro Small Business) category, which began in 2018 and will end in 2022. workforce and have opportunities for market improvement. KOMPAK bridges the relationship between MSEs in the village and private partners who act as buyers and local governments, especially districts. Local government engagement is carried out with the aim of ensuring sustainability where local governments adopt this approach widely and allocate budgets for this model.

This study was conducted to evaluate KOMPAK’s intermediary pilot. The scope of the evaluation covers two things, namely related to the implementation of the field trial and its results, as well as potential/indications of the sustainability of this model at the local government level. Evaluation was carried out on five of the 14 commodities/trial locations, namely in West Aceh (water hyacinth handicraft), Pekalongan (batik), Trenggalek (biopharmaceuticals), Pacitan (mokaf flour), and North Lombok (tourism village). Data was collected through a review of program documents and interviews with KOMPAK program implementers including field implementers, MSEs and their workers, as well as relevant informants. In total, this study interviewed 91 informants, including 30 female MSEs and their workers. This study also adds examples from the literature to strengthen policy input.

1] DPJB. (2020, June 19). To Support MSMEs in Facing the Pandemic, the Government Provides Interest Subsidies. Directorate General of Treasury, Ministry of Finance of the Republic of Indonesia. https://djpb.kemenkeu.go.id/portal/id/component/content/article/842-campaign-4/3335-support-umkm-hadapi-pandemi,-government-provide-subsidi-flower.html?Itemid =776