Labamu x LiftWomen: Empowering Women Entrepreneurs to Grow and Thrive

SMEs are the backbone of Indonesia’s economy.This sector contributes more than 60% to the national Gross Domestic Product (GDP) and employs over 90% of the workforce. Interestingly, 64% of SME players in Indonesia are women—an impressive number that reflects the vital role women play in driving the country’s economy.

Unfortunately, despite their large presence, the contribution of women-led businesses to the GDP remains relatively small—only around 10%. This is largely because most of these businesses operate on a micro and informal scale, with limited access to formal financial services and digital technology.

Through the Labamu x LiftWomen collaboration, we are reminded that this massive potential can grow, scale up, and make a greater impact—if given the right support.

So how can this be achieved? Let’s explore it together!

The Strategic Role of SMEs in Indonesia’s Economy

SMEs play a fundamental role in the national economy by supporting stability and driving inclusive economic growth. By understanding their core functions, Labamu Friends will see just how crucial it is to support and develop this sector for a more advanced Indonesia.

1. The Largest Provider of Employment

According to CNBC Indonesia, SMEs absorb around 97% of the national workforce. With their wide scale and presence even in the most remote areas, SMEs provide job opportunities across all levels of society—including those with lower education levels and those living in rural regions. This helps reduce unemployment and strengthens economic inclusivity.

2. Significant Contribution to GDP

Overall, SMEs contribute more than 60% to Indonesia’s GDP—although women-led SMEs currently contribute only about 10%. Nevertheless, this large share demonstrates that SMEs are a key engine in driving the nation’s economic growth.

3. Driving Local and Regional Economies

The widespread presence of SMEs across the country helps circulate money at the local level by providing goods and services tailored to community needs. As a result, SMEs play a critical role in reducing regional disparities and improving the welfare of people in villages and small towns.

4. A Platform for Business Innovation and Creativity

Many SMEs succeed by offering unique products and employing creative marketing strategies—especially in sectors like homemade food, handicrafts, and digital services. These innovations not only attract local markets but also have the potential to reach national and international audiences.

5. Promoting Economic Independence

SMEs provide economic opportunities to those who might otherwise struggle to access formal employment. By starting their own businesses, many SME entrepreneurs can increase their income and quality of life. In turn, SMEs help strengthen the people’s economy, reduce poverty, and contribute to national development.

The Role and Challenges of Women in SMEs

Empowering women in SMEs creates a powerful domino effect. When women successfully grow their businesses and increase their income, the impact extends beyond household welfare—it also improves their children's education, strengthens the economy, and contributes to broader social development.

However, women entrepreneurs face a number of challenges that hinder their business growth, such as:

1. Most Operate in the Micro and Informal Sectors

Many women run small-scale businesses such as home-based food production, handicrafts, or neighborhood shops that are still informal and limited in scale. This restricts their access to vital business support services like business loans and broader professional networks.

2. Limited Access to Digital Tools and Business Education

Women in SMEs often face barriers to accessing digital technology, which is now crucial for marketing and managing a business. On top of that, limited education in business management hampers their ability to grow sustainably. These gaps are even more pressing as the modern business world increasingly relies on digital transformation and efficient operations.

3. The Double Burden of Business and Household Responsibilities

In addition to running a business, many women still carry a significant share of household and caregiving duties. This double burden drains their time and energy, making it difficult to fully focus on business development. In such situations, women need to find balance and support systems to help their businesses thrive.

4. Social Stigma and Gender Stereotypes

Women often face social expectations that they should focus solely on domestic responsibilities, resulting in a lack of support for their entrepreneurial efforts. These gender stereotypes can also limit women from taking on leadership roles or being taken seriously as business owners.

5. Reliance on Informal Sources of Capital

Due to limited access to formal financial institutions, many women turn to family, friends, or even informal lenders who charge high interest rates. This reliance increases their financial vulnerability and creates barriers to business growth.

Labamu x LiftWomen for Women Entrepreneurs in SMEs

Increasing the role of women in the SME sector is not just about numbers, but also about the quality and economic impact they create. That’s why the right support is crucial to help women business owners overcome the challenges mentioned earlier.

Understanding this, Labamu provides real solutions through comprehensive financial services such as business accounts, digital payments, PPOB, QRIS, and microfinancing, making it easier for women to manage their businesses professionally. Additionally, Labamu offers a business community, LabamuHub, which serves as a platform for SME entrepreneurs to connect and collaborate.

On the other hand, you can also get support from global initiatives like LiftWomen, which offers business networks, training, and funding access to help women achieve greater success.

Now you see why Labamu x LiftWomen launched this initiative—to empower women and open wider opportunities to drive economic growth!