Increasing Market Access for MSME: The role of e-commerce and transportation infrastructure

Micro, small, and medium enterprises (MSMEs) are an important source of growth and employment in low- and middle-income countries, including Indonesia. However, many entrepreneurs face challenges in increasing their productivity and growth due to limitations in three main areas: 1) financial access, partially due to limited information on loan options, lack of collateral, or historical credit information; 2) managerial capacity, due to lack of business management skills and innovation; and 3) market access, due to limited digital literacy and business skills to navigate online marketplace and high logistics costs. 

This memo, the third out of three series, draws Insights from past evaluations to give recommendations and learnings on ways to  improve the support for MSMEs in expanding their market access: 

1. Anonymized sales and purchase data can provide insights into the welfare gains brought by e-commerce and the impact of providing digital support for MSMEs.
2. Business training designed to onboard MSMEs to e-commerce empowers entrepreneurs to utilize supporting services provided by the platform and maximize their presence.
3. By measuring the impact of programs aimed at reducing logistical barriers for MSMEs, the expansion of e-commerce can be better informed by evidence.

For further insights on access to finance and managerial capacity, refer to the subsequent memos on improving MSMEs' financial access and capacity-building.