Transforming Social Assistance into Entrepreneurial Empowerment: UMi as a Public Sector Innovation in Indonesia

Nisa Novia Avien Christy (), Syahrir Ika, I Ketut Ardana, Radna Andi Wibowo, Prameshwara Anggahegari, Lokot Zein Nasution, Darwin, Suryaneta, Juni Hestina and Roosganda Elizabeth
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Nisa Novia Avien Christy: National Research and Innovation Agency, South Jakarta 12710, Indonesia
Syahrir Ika: National Research and Innovation Agency, South Jakarta 12710, Indonesia
I Ketut Ardana: National Research and Innovation Agency, South Jakarta 12710, Indonesia
Radna Andi Wibowo: School of Business, Woxsen University, Hyderabad 502345, India
Prameshwara Anggahegari: National Research and Innovation Agency, South Jakarta 12710, Indonesia
Lokot Zein Nasution: National Research and Innovation Agency, South Jakarta 12710, Indonesia
Darwin: National Research and Innovation Agency, South Jakarta 12710, Indonesia
Suryaneta: Faculty of Industrial Technology, Sumatra Institute of Technology (ITERA), South Lampung Regency, Lampung 35365, Indonesia
Juni Hestina: National Research and Innovation Agency, South Jakarta 12710, Indonesia
Roosganda Elizabeth: National Research and Innovation Agency, South Jakarta 12710, Indonesia

Administrative Sciences, 2025, vol. 15, issue 11, 1-23

Abstract: The Ultra-Micro (UMi) financing program represents a significant public sector innovation in Indonesia’s approach to poverty alleviation and financial inclusion. Initially conceived as a social assistance initiative, UMi has evolved into a strategic government intervention designed to transform impoverished individuals into entrepreneurs. This shift reflects a policy innovation that redefines the role of the state from passive welfare provider to active enabler of economic participation. Despite ambitious goals, its implementation and impact face scrutiny. This study employed an exploratory qualitative approach through individual interviews with elite participants and debtors of UMi. The data used triangulation from documentation, observation, and in-depth interviews with key informants, selected through purposive sampling. Findings indicate that the program’s implementation—anchored in government regulations and executed through non-bank financial institutions (NBFIs)—demonstrates innovative service delivery. In this study, UMi exemplifies how public sector innovation—through policy reform, institutional collaboration, and community engagement—can drive inclusive economic growth. The study provides valuable insights for policymakers, practitioners, and scholars seeking to advance financial inclusion and sustainable economic development.

Keywords: ultra-micro financing; Indonesia; non-bank financial institution; women entrepreneurship; public sector innovation; inclusive finance (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2025
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