JAKARTA: In East Lombok, West Nusa Tenggara, Ernawati grows chilies to support her livelihood. For years, she operated on a limited scale and relied on Rp5 million in annual microfinance to purchase seeds and cover basic production costs.

Across Indonesia, the challenges facing ultra micro and micro entrepreneurs are often framed as financing problems. Their businesses depend on access to knowledge, technology, permits, markets, and supply chains.

Ernawati faces production and market risks alongside financing needs. Unpredictable weather can damage chilies during the traditional sun drying process. Rain during drying can reduce product quality, shorten shelf life, and affect her income.

Each planting season requires decisions across production, processing, and sales. Ernawati needs to protect harvest quality, develop processed products, and maintain access to buyers during changing weather conditions.

Her experience reflects conditions faced by many micro entrepreneurs. They can operate their businesses, but many lack access to connected support systems.

“Business growth cannot happen within a fragmented system. Support must strengthen entrepreneurs and the connections among finance, markets, technology, aggregators, cooperatives, and supply chains,” said Faye Wongso, Founder and Chairperson of KUMPUL Impact.

KUMPUL Impact responds through an ecosystem approach. It works with local partners, private companies, government institutions, and communities. These partnerships connect financing, capacity building, technology, supply chains, and market access.

Building Inclusive Supply Chains

KUMPUL Impact applies this approach through several programs. One example is EmPower II, implemented with UN Women and PT Permodalan Nasional Madani, or PNM.

The program supports women operating ultra micro businesses and women smallholder farmers. Participants receive financing and practical assistance based on their business needs.

In Lombok, Ernawati gained access to a solar dryer, postharvest knowledge, and guidance for developing processed chili products.

“This was my first experience joining regular training. I learned from the trainers and connected with other women in the community. I can now think about other products I can make from my chilies,” Ernawati said.

Through EmPower II, KUMPUL Impact and UN Women, in collaboration with PT PNM, have supported 6,000 women entrepreneurs and smallholder farmers. The support includes green financing and capacity building for climate related livelihood risks.

The program has recorded several practical outcomes:

• Solar dryers reduce farmers’ reliance on weather during the drying process.

• Dried chili products have a longer shelf life and support additional market opportunities.

• Postharvest knowledge helps farmers protect product quality and plan further processing.

In Lombok, the program connects technology, product processing, financing, and market access. Farmers can use these resources to manage production risks and develop value added products.

Closing the Digital Skills Gap for Business Competitiveness

Digital adoption creates another set of challenges for micro and small enterprises. Technology now influences market access, daily operations, customer communication, and business decisions.

Data compiled in the KUMPUL Impact Report indicates that around 1 percent of Indonesia’s workforce has advanced digital skills. Around 50 percent has basic to intermediate digital skills.

This gap affects the ability of small businesses to participate in the digital economy. Limited skills can restrict productivity, market access, and the practical use of digital tools.

KUMPUL Impact includes digital skills and artificial intelligence, or AI, within its long term economic readiness work. The focus is practical application. Entrepreneurs learn how to use technology for daily business needs and changing market conditions.

Through AI for MSME Advancement in ASEAN, or AIM ASEAN, KUMPUL Impact works with the ASEAN Foundation and AI Ignition Indonesia. The program identifies barriers to technology adoption, relevant skills, and practical AI use cases for daily business activities.

Insights from participants inform policy discussions on AI readiness for micro and small enterprises. These discussions involve the ASEAN Coordinating Committee on Micro, Small and Medium Enterprises, the ASEAN Foundation, government institutions, and other stakeholders.

This process grounds policy development in the documented needs of participating entrepreneurs.

The programs have recorded the following reach:

• AIM ASEAN targets 32,000 entrepreneurs across 20 cities in Indonesia.

• The program includes 128,000 training hours.

• AI Ignition Indonesia has engaged 9,000 digital talents.

• Around 4,500 participants have earned digital skills certification.

Bu Neneng, a tempeh chips entrepreneur, began using AI through AI Ignition Indonesia. She has operated her business since 2018.

She now uses AI to create promotional materials, develop her brand identity, and complete product design needs independently. This use of technology reduces her reliance on external design services and shortens the production process for marketing materials.

Building Foundations for Sustainable Economic Growth

In 2025, KUMPUL Impact supported 511 micro and small enterprises across Indonesia. This figure included 200 women led businesses in Lombok, Sumbawa, and other areas of West Nusa Tenggara.

Each program is designed with ecosystem partners and local needs in mind. The work connects entrepreneurs with markets, technology, financing, and value chains that support business operations.

Ernawati and Bu Neneng received support based on their business needs. Ernawati accessed postharvest technology and product processing knowledge. Bu Neneng gained digital skills for branding, design, and promotion.

Their experiences reflect the role of connected support systems in local economic growth. Financing supports business continuity. Supply chain support creates added value. Digital skills help entrepreneurs manage operations and reach markets.

Through this approach, KUMPUL Impact works to strengthen local economies that are inclusive, climate resilient, and prepared for ongoing technological change.

About KUMPUL Impact

KUMPUL Impact is part of KUMPUL and focuses on entrepreneurship development in Indonesia. It supports early stage entrepreneurs and local communities through capacity building, market access, technology adoption, and cross sector collaboration. Its programs connect partners across the ecosystem to support inclusive and sustainable economic growth.