CIRCULAR ECONOMY-BASED MSME BUSINESS MODEL DEVELOPMENT: PILOTING IN SEVERAL BI’S REPRESENTATIVE OFFICE

Donni Fajar Anugrah, Freddy Firmansyah, Melyanna Nur Ainni, Honesty Saffira Putri, Mohammad Marza Naufal, Hilya Jannatul Imron, Owen Alberto Liem, Arnita Rishanty, Ratna Oktriyani, Rudy Marhastari and Dila Safitri
Additional contact information
Donni Fajar Anugrah: Bank Indonesia
Freddy Firmansyah: Bank Indonesia
Melyanna Nur Ainni: Bank Indonesia
Honesty Saffira Putri: Bank Indonesia
Mohammad Marza Naufal: Bank Indonesia
Hilya Jannatul Imron: Bank Indonesia
Owen Alberto Liem: Bank Indonesia
Arnita Rishanty: Bank Indonesia
Ratna Oktriyani: Bank Indonesia
Dila Safitri: Bank Indonesia

No WP/11/2025, Working Papers from Bank Indonesia

Abstract: This research aims to formulate a circular economy-based MSME business model through a pilot program at several Bank Indonesia Domestic Representative Offices. Using a mixed-methods approach, the study combines quantitative analysis, including Cost-Benefit Analysis (CBA), Social Benefit-Cost Ratio (SBCR), and an Input-Output model, with qualitative analysis through interviews, FGDs, and field observations. The results of the study show that the implementation of the circular economy by MSMEs provides significant economic and social benefits, including increased cost efficiency, increased value creation, reduced waste, and a positive contribution to labor absorption. The integration of social benefits into the feasibility analysis showed an increase in the SBCR ratio, reinforcing the argument that the circular economy plays a role in lowering environmental impact and improving local well-being. This study recommends strengthening supply chain partnerships, increasing access to green financing, advancing business digitalization, implementing quality certification, and developing cluster ecosystems as acceleration strategies.

Keywords: Circular Economy; MSMEs; Input-Output; Cost-Benefit Analysis (search for similar items in EconPapers)
JEL-codes: C67 L26 Q53 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2025
New Economics Papers: this item is included in nep-env
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