Strategy development for MSMEs in the Indonesian marketplaces through loans with performance guarantees

Micro, Small and Medium Enterprises (MSMEs) play an important role in the Indonesian economy, which functions as a driver of inclusive economic growth. In an effort to make MSMEs part of a business development strategy with easy access to funding through digitalization of loan facilities, namely marketplaces that allow MSMEs to obtain funding in an easier and faster way. This study uses a qualitative approach combining normative legal research and empirical case analysis to examine the application of performance guarantees in marketplace loan facilities and their impact on MSME development in Indonesia. The performance guarantee applied to loan facilities in the marketplace prioritizes trust based on character, ability, capital, and condition of economy in managing productive businesses that provide easy access to funding for MSMEs. The performance guarantee in assessing the eligibility of debtors in marketplace loan facilities uses a credit score from an assessment of character, ability to repay funds, capital, and condition of economy which is a form of risk management and third party involvement if necessary in the case of alternative credit scoring that use alternative data with credit score results as a consideration for assessing the eligibility of debtors. The application of performance guarantees emphasizes the potential of productive MSME businesses that open wider access to funding and support sustainable business development.