MANAGEMENT IN MICRO, SMALL, AND MEDIUM ENTERPRISES (MSMEs): CHALLENGES AND SOLUTIONS AMID ECONOMIC UNCERTAINTY

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play an important role in supporting the economy in Indonesia. MSMEs are often considered the backbone of the economy because they are able to create jobs, drive economic growth, and strengthen local economic resilience. Amid economic uncertainty influenced by global changes, financial crises, and natural disasters, MSMEs face various challenges that can affect business continuity. These challenges include limited capital, fluctuations in market demand, and changes in regulations that can have a direct impact on business activities. This study uses a qualitative approach with a literature study method to deeply understand the challenges and risk management strategies implemented by MSMEs in facing economic uncertainty. The literature study method was chosen because it is able to provide a comprehensive overview of various relevant references, such as books, scientific journals, and research reports. The results of the study show that MSMEs face four types of risks, namely financial, operational, market and regulatory risks. Financial risks include limited access to financing and income instability, while operational risks relate to production efficiency and resource management. Market risk involves fluctuations in demand and intense competition, while regulatory risk relates to changing government policies. The strategies implemented by MSMEs in facing this challenge include market diversification, business digitalization, collaboration with financial institutions, and training and education for business actors. Market diversification helps MSMEs expand their customer reach, while business digitalization allows for increased efficiency and wider market access. Collaboration with financial institutions facilitates access to financing, while training and education increase the capacity of business actors in managing risk. This study confirms that the implementation of effective risk management is a key factor in maintaining the sustainability and competitiveness of MSMEs amid economic uncertainty.