The impact of the national economic recovery program and digitalization on msme resilience during the covid-19 pandemic

Abstract

This study investigates how the National Economic Recovery Program (PEN) and digitalization influenced MSME resilience during the COVID-19 pandemic, focusing on Bank Rakyat Indonesia (BRI) customers. Drawing on primary data from a 2021 survey involving 6009 BRI clients, the research uses a generalized ordered logistic regression model to assess the effectiveness of various government support measures. Results show that MSMEs receiving a combination of new loans, interest subsidies, and credit restructuring exhibited the highest level of resilience. In contrast, those provided only with new loans experienced improved liquidity but no significant gains in sales or profitability, while firms offered only restructuring assistance showed reduced resilience. Additionally, the findings emphasize that MSMEs engaged in digitalization for over a year demonstrated greater resilience than non-digitalized businesses. The study underscores the importance of delivering multiple, well-targeted forms of government support and promoting long-term digital transformation among MSMEs. These efforts are vital to enhancing MSME resilience in times of economic disruption, particularly during global crises like the COVID-19 pandemic.