By R. Dwi Tjahja K.
The Covid-19 pandemic has dealt a devastating blow to many aspects of the economy, with micro, small and medium enterprises (SMEs) as no exception. Notwithstanding, SMEs have proven resilient as the foundation and backbone of the economy. Based on data issued by the Ministry of Finance in March 2021, SMEs in Indonesia totalled 64.2 million units, contributing more than 61% of gross domestic product (GDP) with a value of Rp8,573.89 trillion. In addition, SMEs absorbed 97% of the total labour force and attracted up to 60% of total investment in Indonesia.
According to a survey conducted by BPS-Statistics Indonesia in 2020, however, approximately 69.02% of SMEs have experienced capital shortfalls during the Covid-19 pandemic. The data shows that capital assistance for SMEs is not only important but also necessary. During the pandemic, many SMEs were forced to restructure loans, with more than 3.59 million units participating in the loan restructuring program as of 31st July 2021 and a total value of Rp285.17 trillion.
Not only the government and conventional banking industry but sharia banks have also participated in the SMEs revival through sharia financial technology (FinTech) as a form of technological development that underpins sharia-compliant financial services.
According to Bank Indonesia data from 2021, Islamic finance disbursed to SMEs has grown consistently in line with the national economic recovery process. In October 2021, SME financing increased 8.98% (yoy) to Rp75.07 trillion on the back of various policies to revive financing to SMEs impacted by the Covid-19 pandemic.
Unlocking access to digital finance for SMEs by offering convenient, fast and affordable financial services represents the cornerstone of accelerating the national economic recovery, while maintaining financial system stability and developing the economy. Programs for economic and financial inclusion as well as the Islamic economy and finance must be expanded, encompassing digitalisation as well as greater access to domestic and export markets.
Policy support for SMEs to Go Online from the Ministry of Cooperatives and SMEs as well as the Ministry of Communication and Information Technology has been well received with SMEs adapting creative technologies through product marketing via online platforms and marketplaces. This emerging trend inspired Okfalisa et al. to initiate research in 2021 on using a smart dashboard application to make sharia FinTech recommendations with a focus on post-pandemic SMEs digitalisation.
Based on business intelligence, the smart dashboard was designed to help classify sharia FinTech product tools based on SMEs readiness for digitalisation. These tools, therefore, provide convenient access to interactive information and knowledge for decision-makers in the quadruple helix (government, academia, corporations and communities) to make appropriate recommendations for sharia FinTech product tools based on the analysis of SMEs readiness for digitalisation.
Scientifically, the smart dashboard concept for sharia FinTech recommendations represents the integration of several computer science, information systems and data analysis disciplines through the design and development of an application-based data-driven Decision Support System (DSS), SMEs digitalisation readiness performance as well as the sharia economy and banking. The hybrid processes in the data-driven DSS embody a novel contribution to combining big data analytics with the Fuzzy AHP and Data Mining approaches.
The research aims to measure the digitalisation readiness of sharia SMEs, first, from a business economics perspective using the variables of business activity (BA), management (MG), transactions (TC), marketing (MC), the micro-environment (MI) and macro-environment (MA), as well as IT readiness, including IT-education, IT-culture, IT-financial and IT-infrastructure.
Second, mapping to measure the readiness of SMEs for digitalisation through a normal distribution approach is used to map the performance index level of SMEs using Association Rules techniques. Third, k-means clustering is used based on 5C conditions, namely character, capacity, capital, condition and collateral. Fourth, rule-based forward chaining is applied to map the performance level index and k-means clustering in order to produce the best recommendations for sharia FinTech products by ranking the products used.
From this research, the smart dashboard application can be used as a guide and means to monitor the financial and economic management of sharia banking in Indonesia. All components of the quadruple helix (government, academia, corporations and communities), particularly Bank Indonesia and the Financial Services Authority (OJK) as the decision-making authorities, can monitor and evaluate SMEs performance together, while identifying issues affecting SMEs, with the goal of providing optimal solutions and recommendations to safeguard the sustainability and success of SMEs towards digital business.
Consequently, more appropriate and focused strategic policies can be instituted towards ensuring the business success of SMEs when confronting the digital era, while simultaneously accelerating the national economic recovery.
