Jakarta (ANTARA) \u2014 The Institute for Development of Economics and\nFinance (Indef) says the Free Nutritious Meals (MBG) programme and the\nRed and White Village\/Sub-district Cooperatives (KDKMP) need to be\nintegrated to increase MSME participation and ensure government spending\nhas a greater impact on local economies.<\/p>\n
The recommendation is based on the institute\u2019s study of MSME\ninvolvement in the MBG and KDKMP ecosystems, which surveyed 1,806\nrespondents across Indonesia in August 2026.<\/p>\n
The study found that the programmes\u2019 wide reach had not been matched\nby broad MSME participation in their supply chains, meaning their\nbenefits for small businesses remained suboptimal, according to Indef\u2019s\nfindings received in Jakarta on Tuesday.<\/p>\n
The research found that 97 per cent of respondents were familiar with\nMBG, and that the programme was present in 92 per cent of the villages\nor urban wards represented in the survey. However, only 5 per cent of\nformal MSMEs and 1 per cent of informal MSMEs had partnered with the\nprogramme or were exploring a partnership.<\/p>\n
\u201cAbout 80 per cent of MSMEs have yet to see new business\nopportunities emerging from the two programmes. This indicates a low\nmultiplier effect,\u201d the report said.<\/p>\n
Indef said the findings pointed to a need to improve programme design\nso that government spending not only supports operations but also\ncreates business opportunities and spreads economic benefits to MSMEs in\nlocal areas.<\/p>\n
It recommended widening local MSMEs\u2019 access to procurement,\nsimplifying procedures and adjusting procurement scales, ensuring\nsuppliers are paid on time, developing contract-based financing, and\nstrengthening KDKMP as an aggregator of local production and\ndistribution.<\/p>\n
Proposed measures include publishing the supply requirements of each\nMBG kitchen and KDKMP cooperative, and setting targets for spending with\nlocal micro and small businesses. Greater transparency, Indef said,\nwould make it easier for MSMEs to access procurement opportunities and\njoin programme supply chains.<\/p>\n
Alongside procurement access, payment certainty and the availability\nof financing are also important. Indef proposed issuing standard\nfixed-term contracts that MSMEs could use as a basis for obtaining\nfinance to fulfil orders.<\/p>\n
Under the proposed integration, KDKMP would act as an aggregator\nlinking local producers and MSMEs with MBG kitchens, while also\nstrengthening the distribution of products in local areas.<\/p>\n
Strengthening local supply chains is also considered important to\nmitigate the impact of competition on small businesses.<\/p>\n
According to Indef\u2019s survey, 22 per cent of respondents reported a\ndecline in business activity because of MBG, while only 5 per cent\nreported an increase. Informal MSMEs were particularly affected by the\ndownturn.<\/p>\n
To minimise this impact, Indef proposed stronger partnerships among\nschool canteens, MBG kitchens, KDKMP cooperatives and local food stalls.\nThe arrangement is intended to expand market access for MSMEs while\nhelping established community businesses remain viable.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indef-mbg-kdkmp-integration-needed-to-expand-msme-participation-1792482843", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }