On Tuesday, August 6, 2024, the Indonesian Environmental Fund (Badan Pengelola Dana Lingkungan Hidup), the United Nations Development Programme (UNDP), and the Resilience Development Initiative (RDI) held a Focus Group Discussion (FGD) aimed at designing revolving funds for Micro, Small, and Medium Enterprises (MSMEs) that are vulnerable to climate change. This event, held at the Hotel Mercure Sabang in Jakarta, is part of ongoing study on resilience-revolving funds targeting MSMEs.
A dedicated team including Dr Saut Sagala (Senior Research Fellow), Hoferdy Zawani, M.A. (Deputy Director), Priskila Sulaiman, B.A. (CEGF Programme Officer), Rayinda Putri, B.A. (CEGF Research Officer), Cyril Anfasha Firmansyah, B.A. (CEGF Research Officer), Kharis Aulia Alam, M.S. (DCR Research Officer), Alifa Zalfa Poetry Wicaksono, B.Eng. (DCR Research Officer), and Nadira Alyssa, B.Soc. (Outreach Officer) represents RDI.
The event commenced with opening speeches by Dr Joko Tri Haryanto, Director of BPDLH, and Christian Usfinit, M.Eng., Team Leader for Resilience and Reconstruction at UNDP. Both emphasised the critical need for collaboration and innovative approaches to address the climate challenges faced by MSMEs.
A panel session preceded the FGD to provide a comprehensive understanding and set the stage for the discussion sessions. This session aimed to share insights from experts with extensive experience and knowledge of the issues at hand, ensuring all participants comprehensively understood the discussed topics. The panel session featured four distinguished speakers: Damayanti Ratunanda, B.Sc., M.Eng. Director of Fund Distribution at BPDLH, who discussed the mechanisms of existing revolving fund distribution and associated challenges; Noor Syaifudin, PhD, a policy analyst at the Center for Climate Change and Multilateral Financing Policy (Pusat Kebijakan Pembiayaan Perubahan Iklim dan Multilateral/PKPPIM) under the Fiscal Policy Agency (Badan Kebijakan Fiskal/BKF), who provided insights into financing policies related to climate change; Ikatri Meynar Sihombing, M.A., a Microfinance Specialist, who highlighted the crucial role of microfinance in supporting MSMEs; and Dr Saut Sagala, an expert in community resilience financing, who shared strategies on how financing could enhance MSMEs resilience to climate change.
The FGD participants included stakeholders from various sectors, encompassing government representatives and organisations supporting MSMEs. The FGD session had three groups, with participants and stakeholders evenly distributed across these groups to ensure focused and comprehensive discussions.
There were two key discussion sessions in the FGD. The first session focused on assessing the needs and context of revolving funds for MSMEs. Participants discussed the specific conditions and challenges MSMEs face in different regions. This session aimed to identify the financial and non-financial needs of MSMEs that could be addressed through revolving funds, drawing on the perspectives and experiences of the stakeholders.
The second session of the FGD centred on policy analysis and the design of revolving funds for MSMEs. This discussion began with a review of existing revolving fund policies and programmes, including their successes and challenges. Participants sought to identify gaps that needed to be addressed or improved. The session also covered determining effective fund disbursement mechanisms and establishing robust monitoring and evaluation systems. These systems are crucial to ensuring that the revolving funds are utilised efficiently and achieve the desired outcomes.
By the end of the FGD, participants had developed a comprehensive understanding of the challenges and opportunities in designing revolving funds for climate-vulnerable MSMEs. The discussions underscored the importance of a tailored approach that considers the unique needs and contexts of MSMEs across different regions. The insights and recommendations generated from the FGD are expected to provide a practical and detailed guide for improving and designing effective revolving fund policies. These policies should be capable of supporting the growth and sustainability of the MSME sector in Indonesia.
The collaborative efforts between RDI, UNDP, and BPDLH, along with the active participation of various stakeholders, are anticipated to foster innovative solutions that enhance the resilience of MSMEs to climate change. In conclusion, the FGD hosted by RDI marks a significant step towards developing sustainable financial mechanisms that support MSMEs in adapting to and mitigating the impacts of climate change. Continued collaboration and innovative policy design will hopefully enable MSMEs to achieve greater resilience and contribute to Indonesia's sustainable development.
