| Summary/Abstract |
This paper examines the Indonesian government's policy response under the PEN (National Economic Recovery) programme aimed at assisting MSMEs during the COVID-19 crisis. The findings show that the scheme significantly benefited the enterprises. Credit restructuring and interest subsidy programmes offered critical assistance to the beneficiaries and improved their access to credit options. Moreover, the Productive Government Assistance for Micro Businesses (BPUM) initiative enabled the beneficiary enterprises to address emergency working capital needs required during the pandemic. However, this study also identifies several hurdles that reduced the effectiveness of the PEN programme. These challenges could have been overcome by striking a balance between banked and unbanked MSMEs, maintaining reliable databases for targeted recipients, and strengthening coordination between the various agencies involved.
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