MSC and Small Firm Diaries: A path to policy transformation in Indonesia

• Dec 28, 2023
• 2 min

MSC was responsible for the coordination, management, and monitoring of the implementation of the Small Firm Diaries, a global, multi-country research initiative to understand the barriers to the growth and productivity of small firms. The study report could help the Government of Indonesia formulate more accurate and targeted policies.

The Small Firm Diaries is a global research initiative managed by the Financial Access Initiative at New York University. It intends to understand low-income small firms’ role in poverty reduction. It also sought to identify barriers that impede their growth and productivity and limit their contribution to local economies. This research focused specifically on firms that employed between one and 20 non-family member employees.

The study used the financial diaries methodology for data collection. The methodology involved the gathering of high-frequency quantitative and qualitative data. In each country, a team of locally hired field researchers visited a sample of small firms weekly for a year. They meticulously captured daily data on financial flows and the decision-making processes behind these flows.

MSC served as the lead implementation partner, alongside L-IFT (Low-Income Financial Transformation), to manage the data collection for the Small Firm Diaries study’s Indonesian segment. This involved critical tasks, such as the selection and screening of research locations, recruitment and training of field research teams, supervision of the field research implementation, and rigorous data quality control procedures. The study included 162 firms from Bandung, Makassar, Medan, and Yogyakarta in Indonesia.

The MSC Indonesia team also contributed significantly to the research design to ensure its relevance and effectiveness in the Indonesian context. We also collaborated to produce various research outputs, which included research reports and case studies.

Furthermore, MSC Indonesia played a critical role to convene the project’s Indonesian Advisory Group. This esteemed group served as a valuable sounding board throughout the project. They actively responded to research findings and provided advice on Indonesian priorities and context. The Advisory Group boasted the participation of more than 300 esteemed members, which included ministers, deputy ministers, C-level leaders, and directors from more than 80 organizations. These organizations spanned government ministries, private sector entities, non-governmental organizations, and international development agencies.

The New York University commissioned this project. This project is currently active in seven countries: Colombia, Ethiopia, Kenya, Nigeria, Indonesia, Fiji, and Uganda from 2021 to 2023.