Indonesia is home to over 62 million micro and small enterprises — 99% of them micro. Together, they employ 97% of the nation’s workforce and contribute 61% of GDP, forming the backbone of Indonesia’s economy and playing a vital role in poverty alleviation and inclusive growth. Women entrepreneurs are particularly prominent: they are 1.3 times more likely than their male counterparts to be early-stage entrepreneurs, surpassing the global average.
Yet Indonesian MSEs navigate a complex landscape. Very few access external credit, citing barriers that range from high interest rates and collateral requirements to culturally and religiously driven hesitation toward debt. The digital divide presents both opportunity and vulnerability: smartphone penetration has reached 77% and is projected to climb to 88% by 2026, but rural areas lag significantly behind (55% versus 85% in urban areas), and a persistent gender gap in internet usage remains.
As businesses accelerate digital adoption, they also face an escalating cybersecurity threat — Indonesia ranked 8th globally in data breaches in 2023, with over 660 million records compromised in the first half of 2024 alone. Recent reports reveal that 80% of breaches now stem from system intrusions, with malware and ransomware dominating and external actors exploiting third-party and supply-chain vulnerabilities. These risks increasingly affect Indonesian businesses within the broader APAC digital economy.
This Barometer seeks to understand the lived experiences of Indonesian MSEs and identify pathways for meaningful impact. Based on surveys conducted in 2025 across micro and small enterprises in food and beverage, fashion and crafts, and tourism, the report captures their financial health, support service utilisation, digital adoption, AI awareness, cybersecurity practices, and future outlook.
Women entrepreneurs are especially prominent, with 80% of women-led businesses reporting ownership compared to 66% of men-led businesses. Most respondents (72%) own their businesses, reflecting strong entrepreneurial ownership across the sector.
Nearly half of Indonesian MSEs remain unregistered, not possessing any type of licenses for their businesses (with micro businesses and younger enterprises being far more likely to operate informally). While informality offers flexibility, it restricts access to government programs, formal credit, and new markets.
Only a third of MSEs report revenue growth over the past 12 months, while 39% report declining earnings. Men-led businesses (11%) are more likely than women-led businesses (3%) to report revenues exceeding 200 million IDR annually.
Only one in five MSEs accessed credit in the past year, and 74% did not access any support services. Among those who did access support, almost all found it very useful, with 43% reporting increased revenue compared to 29% of those who did not seek support.
Businesses that accessed finance in the past year are more likely to have also accessed other business support services, illustrating how initial engagement with one form of support can create momentum and confidence to pursue additional resources.
A quarter of respondents report having never heard of artificial intelligence, and over two in five report being unfamiliar with it. One in five businesses currently use AI, primarily for marketing and content creation. Confidence in integrating AI is particularly low among women entrepreneurs.
More than half of MSEs take no cybersecurity precautions at all. Despite this, 51% trust digital platforms to protect their data, revealing a significant gap between perceived safety and actual preparedness. Lack of technical expertise (33%) is the most frequently cited barrier.
Women entrepreneurs are leading digital adoption with higher rates of online storefront usage. However, they face significant readiness gaps: 26% of female-led businesses do not understand cybersecurity benefits (versus 17% of male-led), and 27% lack confidence in integrating AI (versus 18% of men).
71% of businesses consider access to finance important, yet they are equally vocal about needing skills training. Marketing training is viewed as very important by one third of respondents. Half of MSEs anticipate only moderate growth, while 48% prefer to maintain their current size, reflecting a pragmatic, and cautious approach prioritising stability over growth.
More than half of MSEs turn first to government entities for support. 42% accessed support from NGOs in the past 12 months, and 37% from government agencies. Family, friends, and peer MSE networks follow closely, highlighting the relational nature of Indonesian entrepreneurship.
Respondents included owners, senior executives, directors, and managers. The participating businesses represent a diverse range of locations, sizes, sectors, years of operation, and owner demographics, including gender.
Keen to dig deeper? Check out the previous reports below.
