FRESNOFORECLOSURE

A recent study by the Center for Financial Inclusion at Accion provides fresh insights into the dynamics of micro and small enterprises (MSEs) across five major emerging cities, including Jakarta. Based on a survey of over 4,000 businesses, the research explores how digital technology, financial access, and climate resilience are shaping urban economies, with particular attention to women entrepreneurs.

Jakarta stands out for its notably high representation of women among MSE owners. Seventy per cent of MSEs in the Indonesian capital are owned by women, a stark contrast to Delhi, where women comprise only 11 per cent of business owners. This difference highlights the significance of local cultural and socioeconomic contexts.

While studies that focus only on formal businesses often report lower levels of women’s participation due to systemic barriers, the inclusion of informal and mobile enterprises in this research offers a more balanced view. Previous estimates for Indonesia place women’s participation at around 60 per cent, aligning closely with these findings and reinforcing the importance of creating inclusive entrepreneurial ecosystems.

The business structure in Jakarta further reflects these dynamics. Nearly half of all MSEs operate without employees, emphasising the dominance of solo enterprises. Moreover, 47 per cent of businesses are based at home, a factor closely tied to the high levels of women’s ownership. Operating from home allows many women to balance income generation with caregiving responsibilities, providing a practical path to entrepreneurship within prevailing gender norms.

However, entrepreneurship in Jakarta often arises from necessity rather than opportunity. Only around half of business owners reported starting their enterprises by choice, with more than one in three citing a lack of alternative employment options as the driving factor. This necessity-driven entrepreneurship presents both opportunities and challenges for fostering sustainable economic growth.

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Despite the economic pressures that prompt many to start businesses, MSE owners in Jakarta are among the most risk-tolerant in the study. Nonetheless, a gender gap remains. Women entrepreneurs in Jakarta consistently report lower levels of risk tolerance and growth orientation compared to their male counterparts, even when education and experience are taken into account.

Furthermore, women are less likely to self-identify as entrepreneurs, suggesting that societal and systemic factors continue to shape women’s aspirations and perceptions within the business landscape. This mindset disparity may pose additional hurdles for women seeking to scale their enterprises.

Financial services access and digital adoption play critical roles in the success and resilience of MSEs. Yet, in Jakarta, women MSEs face considerable challenges. While the city exhibits a gender gap in reported negative experiences with financial services—20 per cent of men compared to 12 per cent of women—this lower rate among women does not necessarily indicate greater satisfaction.

Rather, it may reflect limited engagement with financial systems or lower levels of awareness about financial rights and mechanisms for redress.

Across Jakarta’s MSE landscape, a significant proportion of entrepreneurs, including women microentrepreneurs, report a limited understanding of financial products. Persistent concerns around data misuse, lack of transparency, and insufficient customer support amplify the risks associated with increased digital adoption.

Many cite complex processes as the primary reason for not taking action or raising complaints when issues arise, indicating a need for more accessible consumer protection measures.

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As digital technology continues to penetrate Jakarta’s economy, exposure to consumer protection risks grows. The findings highlight the critical need for improved financial literacy programmes, stronger data protection frameworks, and more inclusive support services that cater to the specific needs of women MSEs.

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Image Credit: Estefania Rainie on Unsplash

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