IMPROVING THE WELFARE OF MICRO, SMALL, AND MEDIUM ENTERPRISES (MSMEs) AFFECTED BY ECONOMIC CHANGE THROUGH A COMMUNITY ECONOMIC DEVELOPMENT APPROACH IN LAMPUNG PROVINCE

Abstract

The spread of Covid-19 in Indonesia has had wide-ranging impacts on human life, particularly on the economy. Therefore, a breakthrough is needed to address this issue by actively involving the community and working with the government to develop a community economic development program. This background prompted this study intending to obtain the right program for MSMEs affected by Covid-19 in Lampung Province. This study uses a qualitative approach with data collection methods, including observation, interviews, and documentation. The data analysis method used is qualitative analysis, with conclusions drawn using deductive thinking frameworks. The results of this study indicate that the community economic development approach by the Lampung Provincial Government has been implemented using the processes and stages outlined in existing theories. From the process perspective, this approach has successfully gone through each process, and so far, the program is considered capable of addressing the problems faced by MSMEs affected by Covid-19. This approach is considered more effective, as the program has been widely felt and successfully fostered creativity, trust, discipline, optimism, and improving family economies. This approach has also been implemented by Islamic economic values , which consist of the values of divinity, justice, and cooperation.

Full text

JURNAL AL-IJTIMAIYYAH
ISSN 2654-5217 (p); 2461-0755 (e)
Vol. 10, No. 1, January-June 2024: 61-80
DOI: http://dx.doi.org/10.22373/al-ijtimaiyyah.v10i1
Corresponding author:
Email Address: issusanto@radenintan.ac.id
Received: June 8, 2024; Accepted: June 19, 2024; Published: June 30, 2024
Copyright © 2024 Hanif, Is Susanto, Moh. Mukri
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
IMPROVING THE WELFARE OF MICRO, SMALL,
AND MEDIUM ENTERPRISES (MSMEs) AFFECTED
BY ECONOMIC CHANGE THROUGH A
COMMUNITY ECONOMIC DEVELOPMENT
APPROACH IN LAMPUNG PROVINCE
Hanif*, Is Susanto**, Moh. Mukri**
*Universitas Islam Negeri Raden Intan Lampung, Indonesia
E-mail: hanif@radenintan.ac.id
**Universitas Islam Negeri Raden Intan Lampung, Indonesia
E-mail: issusanto@radenintan.ac.id
**Universitas Islam Negeri Raden Intan Lampung, Indonesia
E-mail: moh.mukri@radenintan.ac.id
Abstract
The spread of Covid-19 in Indonesia has had wide-ranging impacts on human life,
particularly on the economy. Therefore, a breakthrough is needed to address this
issue by actively involving the community and working with the government to
develop a community economic development program. This background prompted
this study intending to obtain the right program for MSMEs affected by Covid-19 in
Lampung Province. This study uses a qualitative approach with data collection
methods, including observation, interviews, and documentation. The data analysis
method used is qualitative analysis, with conclusions drawn using deductive thinking
frameworks. The results of this study indicate that the community economic
development approach by the Lampung Provincial Government has been
implemented using the processes and stages outlined in existing theories. From the
process perspective, this approach has successfully gone through each process, and so
far, the program is considered capable of addressing the problems faced by MSMEs
affected by Covid-19. This approach is considered more effective, as the program has
been widely felt and successfully fostered creativity, trust, discipline, optimism, and
improving family economies. This approach has also been implemented by Islamic
economic values , which consist of the values of divinity, justice, and cooperation.
Keywords: Welfare of Society; MSMEs; Covid-19; Community Economic
Development; Lampung.

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DOI: 10.22373/al-ijtimaiyyah.v10i1.24031
Abstrak
Covid-19 yang berkembang di negara Indonesia berdampak luas terhadap kehidupan manusia,
salah satunya dampak pada perekonomian. Oleh sebab itu, perlu dilakukan sebuah terobosan
baru terhadap hal tersebut dengan mengikutsertakan masyarakat secara aktif dan saling bahu
membahu bersama pemerintah dengan mengembangkan program community economic
development. Hal inilah yang kemudian melatarbelakangi kajian ini dilakukan dengan tujuan
untuk memperoleh program yang tepat bagi pelaku UMKM terdampak Covid-19 di Provinsi
Lampung. Kajian ini merupakan kajian lapangan dengan menggunakan pendekatan
kualitatif dengan metode pengumpulan data observasi, interview, dan dokumentasi. Metode
analisis data yang digunakan adalah analisa kualitatif dengan pengambilan kesimpulan
menggunakan kerangka berfikir deduktif. Hasil kajian ini menunjukkan bahwa pendekatan
community economic development oleh pemerintah Provinsi Lampung telah dilaksanakan
sesuai dengan proses dan tahapan pada teori yang ada. Dilihat dari prosesnya, pendekatan ini
telah berhasil melakukan setiap prosesnya, sehingga sampai saat ini program tersebut dianggap
mampu menangani permasalahan bagi pelaku UMKM terdampak Covid-19. Pendekatan ini
dinilai lebih efektif, dimana program tersebut telah banyak dirasakan dan berhasil membangun
kreativitas, kepercayaan, kedisiplinan serta optimis dan mampu mengembangkan
perekonomian keluarga menjadi lebih baik. Pendekatan ini juga telah dijalankan sesuai
dengan nilai-nilai ekonomi Islam yang terdiri dari nilai Ketuhanan, keadilan dan ta’awun.
Kata Kunci: Kesejahteraan Masyarakat; Pelaku UMKM; Covid-19; Community
Economic Development; Lampung.
INTRODUCTION
Disasters can be categorized into three types, namely natural, non-natural, and social
disasters.
1
One of the disasters that struck various countries, including Indonesia, a few
years ago was the coronavirus virus (Covid-19). The spread of Covid-19 in Indonesia at that
time fell into the category of non-natural disasters
2
, which had wide-ranging impacts across
various sectors of life. From a global economic perspective, this epidemic significantly
affected Indonesia's economy and threatened the existence of Micro, Small, and Medium
Enterprises (MSMEs).
3
Although indirectly, their presence positively impacted MSMEs,
1
Johanna Catherine Maclean, Ioana Popovici, and Michael T. French, “Are Natural Disasters in Early
Childhood Associated with Mental Health and Substance Use Disorders as an Adult?,” Social Science &
Medicine 151 (February 1, 2016): hlm. 78-91, https://doi.org/10.1016/j.socscimed.2016.01.006; Lihat juga
dalam Wardatul Fitri, “Implikasi Yuridis Penetapan Status Bencana Nasional Pandemi Corona Virus Disease
2019 (Covid-19) Terhadap Perbuatan Hukum Keperdataan,” Supremasi Hukum: Jurnal Kajian Ilmu Hukum 9,
no. 1 (July 9, 2020): hlm. 76-93, https://doi.org/10.14421/sh.v9i1.2125.
2
Hetiyasari, “Pertanggungjawaban Hukum Bagi Perusahaan Atas Batalnya Perjanjian Kerja Waktu
Tertentu Di Masa Pandemi Covid-19,” Jurnal Usm Law Review 5, no. 1 (May 24, 2022): hlm. 340,
https://doi.org/10.26623/julr.v5i1.4807.
3
Dwi Hanggoro, “Dampak Serta Usaha Pemulihan UMKM Pasca Pandemi Covid-19,” JISMA: Jurnal
Ilmu Sosial, Manajemen, dan Akuntansi 1, no. 5 (December 22, 2022): hlm. 743-748,
https://doi.org/10.59004/jisma.v1i5.253; Lihat juga Ahmad Heri Firdaus et al., Kajian Tengah Tahun INDEF
2020: Menata Arsitektur Ekonomi Pasca Pandemi (Jakarta: Indef, 2020), hlm. 133.

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such as accelerating digitalization, product and service innovation, stronger community
collaborations, and developing skills and capacities, especially for mask artisans, antiseptics,
and others.
Indonesia's national economy, which depends on and is dominated by MSMEs, has
been seriously affected by the Covid-19 pandemic. This impact continues even after the
pandemic, not only affecting production and trade values but also impacting the number
of jobs and the number of people losing jobs. However, MSMEs have a significant
contribution to job creation in Indonesia.
4
According to data from the Ministry of
Cooperatives and SMEs, in 2021, MSMEs contributed to Indonesia's economy by
employing approximately 117 million workers, or 97 percent of the total workforce.
5
This
means that MSMEs make a significant contribution to job creation in Indonesia.
The vulnerable conditions to disasters and the suboptimal disaster mitigation in
Indonesia require breakthroughs in disaster management by actively involving
communities and cooperating with the government. This approach aligns with Ibn
Khaldun's view that social communities (ashabiyah) play an important role in human life.
According to him, humans cannot live independently and require assistance from others.
Cooperation becomes the key to fulfilling human needs through cooperation in obtaining
food and other necessities.
6
The social community theory (ashabiyah) introduced by Ibn Khaldun is the basis for
community-based concepts that encompass various types of communities, including
traditional and modern communities, referred to by Ibn Khaldun as badawah (traditional
communities) and hadharah (modern communities). When applied to the economic realm,
this ashabiyah theory can be considered as the basis for "community-based economics".
7
A community-based economic system is a new approach to addressing financial
problems. This approach focuses on empowering and developing the economy of lower-
class communities with the hope of achieving economic independence.
8
Community
development itself can be defined as a process where community efforts unite with
government authorities to improve the community's economic, social, and cultural
conditions.
9
In further development, community development efforts have become a
4
Sedinadia Putri, “Peran Pembiayaan Syariah Dalam Pengembangan UMKM Di Indonesia,” Al Hisab:
Jurnal Ekonomi Syariah 1, no. 2 (June 30, 2021): hlm. 1–11, https://doi.org/10.59755/alhisab.v1i2.67.
5
M. Junaidi, “UMKM Hebat, Perekonomian Nasional Meningkat,” DJPb | Direktorat Jenderal
Perbendaharaan Kementerian Keuangan RI, July 15, 2023,
https://djpb.kemenkeu.go.id/portal/id/berita/lainnya/opini/4133-umkm-hebat,-perekonomian-nasional-
meningkat.html., diakses tanggal 24 September 2023.
6
Ibnu Khaldun, Muqaddimah, Terj. Ahmadie Thoha (Jakarta: Pustaka Firdaus, 2000), hlm. 72..
7
Khaldun, hlm. 74; Lihat juga dalam Khoiruddin, “Analisis Teori Ashabiyah Ibn Khaldun sebagai
Model Pemberdayaan Ekonomi Umat,” Asas : Jurnal Hukum Ekonomi Syariah 8, no. 1 (2016): hlm. 66,
https://doi.org/10.24042/asas.v8i1.1224.
8
Ramadhan Prasetya Wibawa and Dwi Nila Andriani, “Implementasi Sistem Ekonomi Berbasis
Komunitas Sebqgai Metode Alternatif Pengentasan Kemiskinan Dan Pemberdayaan Ekonomi Kerakyatan
Pada Masyarakat Madiun,” Prosiding Seminar Nasional Hasil Penelitian LPPM Universitas PGRI Madiun, no. 0
(November 1, 2017): hlm. 49.
9
George M. Foster, “Community Development and Primary Health Care: Their Conceptual
Similarities,” Medical Anthropology 6, no. 3 (June 1, 1982): hlm. 184,
https://doi.org/10.1080/01459740.1982.9987016.

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community-oriented social development concept with various terms, such as community
economic development and others.
10
In the context of community development, Community Economic Development
(CED) is considered a primary strategy for improving community conditions, not only as a
response to local economic decline and a lack of hope for revitalization from outside, both
through private market investment and government program support.
11
One of the goals
of this approach is to reduce poverty through training and job creation, as well as involving
residents and stakeholders in its processes.
12
The theory used to address the research problem related to the CED approach for
Covid-19-affected MSMEs in Lampung is the empowerment theory oriented towards
future-oriented and sustainable community development with forms of training,
mentoring, funding, and business networks.
13
Based on preliminary research data in several
districts in Lampung Province, local governments have implemented various community
empowerment programs to support MSMEs. This information is supported by Kusnadi's
statement during the 2023 Cooperative and SME Coordination Meeting in the Ballroom
of the Horizon Bandar Lampung Hotel. Kusnadi stated that one of the local government's
efforts to strengthen the MSMEs sector and entrepreneurship is through implementing
training methods and optimizing incubation activities to support MSMEs.
14
LITERATURE REVIEW
A. Community Welfare
Welfare can be interpreted as a state of security, tranquility, peace, prosperity, and
being free from all kinds of disturbances, difficulties, and similar issues.
15
Welfare can be
understood as a higher sense of living than happiness.
16
A person feels living in welfare
when they experience joy, do not lack within their capabilities, have their soul and mind
calm, feel justice in their life, and are free from oppressive and threatening poverty.
17
In Islam, welfare is referred to as al-falah.
18
Etymologically, it means zhafarah bima
yurid or achieving victory over what is desired, symbolizing victory and prosperity by
10
F.T. Nasdian, Pengembangan Masyarakat (Jakarta: Yayasan Pustaka Obor Indonesia, 2014), hlm. 29-
30.
11
Eric Shragge, Pengorganisasian Masyarakat Untuk Perubahan Sosial, Terj. Zulkipli Lessy (Yogyakarta:
Graha Ilmu, 2013), hlm. 78.
12
Eric Shragge, Pengorganisasian Masyarakat…, hlm. 81.
13
Musa Asy’arie, Islam, Etos Kerja, dan Pemberdayaan Ekonomi Umat (Yogyakarta: Lesfi, 1997), hlm. 141-
144.
14
Masterweb Engine, “Rakor Koperasi dan UKM 2023”, tersedia di
https://biroadpim.lampungprov.go.id/detail-post/rakor-koperasi-dan-ukm-2023-gubernur-arinal-berharap-
jadi-ajang-konsolidasi-untuk-tingkatkan-daya-saing-usaha-melalui-penguatan-koperasi-umkm-dan-
kewirausahaan, diakses 14 September 2023.
15
Apip Alansori and Erna Listyaningsih, Kontribusi UMKM Terhadap Kesejahteraan Masyarakat
(Yogyakarta: Penerbit Andi, 2020), hlm. 49; Abdul Wahab, “Kesejahteraan dalam Perspektif Ekonomi Islam,”
Jurnal Masharif Al-Syariah: Jurnal Ekonomi dan Perbankan Syariah 5, no. 1 (2020): hlm. 101–113,
https://doi.org/10.30651/jms.v5i1.7824.
16
Is Susanto, Mad Heri, and Achmad Fachrudin, “Dampak Strategi Pemasaran Pariwisata terhadap
Peningkatan Kesejahteraan Masyarakat dalam Perspektif Ekonomi Islam (Studi di Pantai Wisata Labuhan
Jukung Krui Kabupaten Pesisir Barat),” Syi`ar Iqtishadi : Journal of Islamic Economics, Finance and Banking 3, no.
1 (May 29, 2019): hlm. 114-135, https://doi.org/10.35448/jiec.v3i1.5518.
17
Anwar Abbas, Bung Hatta dan Ekonomi Islam (Jakarta: Multi Pressindo, 2008), hlm. 166.
18
Minwir Al-Shammari, Mohammad Omar Farooq, and Hatem Masri, Islamic Business Administration:
Concepts and Strategies (London: Bloomsbury Publishing, 2020), hlm. 118.

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attaining bliss in the afterlife.
19
Terminologically, al-falah refers to happiness and fortune in
worldly life and the hereafter.
20
According to Islamic teachings, when viewed from various
angles and dimensions of life as a whole, the term falah is often used to describe a state of
material and spiritual welfare in both worldly life and the hereafter. In simple terms, falah
can be interpreted as glory and victory in life.
21
The indicators of family welfare refer to the provisions of the National Population
and Family Planning Board (BKKBN) of Indonesia, which has introduced the category of
Family Welfare (KS) since 1994, based on a family's physical and non-physical conditions.
There are five categories of family welfare (KS) established by BKKBN, namely Pre-
Prosperous KS, Stage I KS, Stage II KS, Stage III KS, and Stage III Plus KS. This
categorization is based on hierarchically structured indicators reflecting the stages of
forming a prosperous family.
22
B. Community Economic Development
Development, often referred to as empowerment, generally has many interpretations.
The term comes from "power," which means strength or skill. Based on this understanding,
development can be explained as a process towards empowerment, giving power (strength
or ability) to those who do not yet have it, or strengthening what already exists to be better.
23
Linguistically, empowerment comes from the word "empowerment," which is an effort to
enhance the community's ability through encouragement, motivation, and increasing
awareness of their potential, aiming to develop potential through real actions.
24
Empowering the community encompasses developing self-reliance and independence
and strengthening the community's bargaining position at the lower level against pressures
19
Mohammad Faisal and Husni Thamrin, “Falsafah Ekonomi Syariah Sebagai Way Of Life Untuk
Mencapai Falah,” At-Tajdid : Journal of Islamic Studies 2, no. 1 (February 14, 2022), hlm. 1–13,
https://doi.org/10.24014/at-tajdid.v2i1.16431; Lihat juga dalam Ristiyanti Ahmadul Marunta, M.
Wahyuddin Abdullah, and Amiruddin K, “Internalisasi Nilai Siri’ Na Pacce Dalam Transaksi Jual Beli Pada
Pedagang Sebagai Formulasi Nilai Tambah Syariah Untuk Mewujudkan Kesejahteraan Pada Pedagang Di
Pasar Tradisional Gowa,” Jurnal Diskursus Islam 11, no. 2 (August 31, 2023), hlm. 189–203,
https://doi.org/10.24252/jdi.v11i2.41457.
20
Khaerul Aqbar, Azwar Iskandar, and Akhmad Hanafi Dain Yunta, “Konsep Al-Falah Dalam Islam
Dan Implementasinya Dalam Ekonomi,” BUSTANUL FUQAHA: Jurnal Bidang Hukum Islam 1, no. 3 (August
13, 2020), hlm. 516–531, https://doi.org/10.36701/bustanul.v1i3.206.
21
M. B. Hendrie Anto, Pengantar Ekonomika Mikro Islam (Yogyakarta: Ekonosia, 2003); Martini Dwi
Pusparini, “Konsep Kesejahteraan Dalam Ekonomi Islam (Perspektif Maqasid Asy-Syari’ah),” Islamic
Economics Journal 1, no. 1 (June 1, 2015), hlm. 45–59, https://doi.org/10.21111/iej.v1i1.344.
22
Biro Pelaporan dan Statistik, Petunjuk Teknis Pendataan Keluarga Sejahtera (Jakarta: BKKBN, 2017);
Lihat juga dalam BKKBN, “Batasan dan Pengertian MDK,” accessed October 7, 2023,
http://aplikasi.bkkbn.go.id/mdk/BatasanMDK.aspx.
23
Nurul Mualifah and Sri Roekminiati, “Pemberdayaan Masyarakat Kampung Inggris Sebagai
Destinasi Wisata Edukasi Di Kecamatan Pare Kabupaten Kediri,” Jurnal Ilmiah Manajemen Publik Dan
Kebijakan Sosial 2, no. 1 (August 27, 2018): hlm. 172, https://doi.org/10.25139/jmnegara.v2i1.1069; Lihat
juga dalam Ambar Teguh Sulistiyani, Kemitraan Dan Model-Model Pemberdayaan (Yogyakarta: Gaya Media
Pratama, 2004), hlm. 77.
24
Gusti Kade Sutawa, “Issues on Bali Tourism Development and Community Empowerment to
Support Sustainable Tourism Development,” Procedia Economics and Finance, International Conference on
Small and Medium Enterprises Development with a Theme ? Innovation and Sustainability in SME
Development? (ICSMED 2012), 4 (January 1, 2012): hlm. 417, https://doi.org/10.1016/S2212-
5671(12)00356-5; Lihat juga dalam Eddy Ch. Papilaya, Wacana Pembangunan Alternative (Yogyakarta: Ar-Ruzz
Media, 2007), hln. 42.

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from various sectors of life.
25
Community empowerment should be considered an effort to
accelerate and expand steps to overcome poverty through the coordination of policies,
programs, and development activities, both at the central and regional levels, so that its
effectiveness significantly impacts overcoming poverty.
26
The implementation of community economic development holds great hope for
improving the community's standard of living towards a better life. According to Goulet, a
better life encompasses various aspects such as basic living needs, self-esteem, and
freedom.
27
Therefore, economists emphasize that the goal of community economic
development should prioritize what is referred to as absolute necessities, the minimum
requirements to meet basic needs.
28
Community economic development can be viewed through three main perspectives,
namely: creating conditions that support the development of community potential,
strengthening the community's financial capacity to explore economic opportunities, and
community economic development also includes protecting the community and preventing
imbalances in competition in community life.
29
The theory of community economic development refers to Asy’arie's opinion, which
focuses on training, mentoring, capital, and business networks.
30
Another opinion states
that the approach to community economic development can be done through a top-down
approach from the government and a bottom-up approach from the community's strength.
The bottom-up approach consists of revolving capital assistance, institutional
strengthening, infrastructure development assistance, mentoring assistance, local
institutional development, and strengthening business and market partnerships.
31
Meanwhile, the bottom-up approach from the community consists of natural resources,
human resources, a supportive environment, social culture, and community participation.
32
25
Yanhar Jamaluddin et al., “Strategi dan Model Pemberdayaan Masyarakat Miskin di Sumatera
Utara,” Jurnal Administrasi Publik (Public Administration Journal) 9, no. 1 (June 18, 2019): hlm. 21-30,
https://doi.org/10.31289/jap.v9i1.2231.
26
Mohammad Kotib and Prince Charles Heston Runtunuwu, “Penyuluhan Ekonomi Kreatif Tentang
Permodalan dan Strategi Pemasaran pada UMKM Salsabila Kelurahan Sasa Ternate,” Jurnal Pengabdian
Kepada Masyarakat Kalam 1, no. 2 (July 13, 2022): hlm. 96-108.
27
Najmudin Najmudin, Ma’zumi Ma’zumi, and Hasuri Hasuri, “Pengaruh Pondok Pesantren terhadap
Pemberdayaan Ekonomi Perempuan Desa Sekitar (Studi pada Pondok Pesantren Modern Assaadah Desa
Dahu Kecamatan Cikeusal Serang Banten),” Syi`ar Iqtishadi : Journal of Islamic Economics, Finance and Banking
3, no. 2 (November 11, 2019): hlm. 4, https://doi.org/10.35448/jiec.v3i2.6583.
28
Agus Putra Abdul Samad, Hanafiah Hanafiah, and Fairus Fairus, “Penguatan Ekonomi Masyarakat
Melalui Usaha Pembuatan Bubu Sistem Multiple Hole Trap Sebagai Produk Unggulan Di Desa Sukarejo
Kota Langsa,” JMM (Jurnal Masyarakat Mandiri) 5, no. 6 (December 4, 2021): hlm. 3164-3174,
https://doi.org/10.31764/jmm.v5i6.5457.
29
Masrul Efendi Umar Harahap, “Manajemen Pemberdayaan Masyarakat,” Tadbir: Jurnal Manajemen
Dakwah FDIK IAIN Padangsidimpuan 2, no. 1 (June 30, 2020): hlm. 189–204,
https://doi.org/10.24952/tad.v2i1.2638; Lihat juga dalam Mubyanto, Ekonomi Rakyat Dan Program IDT
(Yogyakarta: Aditya Media, 1998), hlm. 28–29.
30
Asy’arie, Islam, Etos Kerja, Dan Pemberdayaan Ekonomi Umat, hlm. 141-144.
31
M. Guntur Effendi, Pemberdayaan Ekonomi Rakyat (Jakarta: Sagung Seto, 2009), hlm. 10-11; Lihat
juga dalam Alexander Phuk Tjilen, Pemberdayaan Ekonomi Masyarakat Lokal dan Tanggung Jawab Sosial
Perusahaan (Teori, Konsep, dan Implementasi Kebijakan Publik) (Sleman, Yogyakarta: Deepublish, 2019), hlm. 6-
7.
32
Tjilen, Pemberdayaan Ekonomi Masyarakat Lokal dan Tanggung Jawab Sosial Perusahaan (Teori, Konsep,
dan Implementasi Kebijakan Publik), hlm. 7.

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C. Micro, Small, and Medium Enterprises (MSMEs)
MSMEs stand for Micro, Small, and Medium Enterprises. This term refers to the
business sector consisting of business units with small to medium scales in terms of the
number of employees, sales turnover, and assets owned.
33
MSMEs are usually an important
part of a country's economy because they create jobs, increase community income, and
support inclusive economic growth. In various countries, MSMEs can have diverse roles,
from consumer goods producers to professional service providers, and are often the driving
force of the local economy.
The Republic of Indonesia Law No. 20 of 2008 on MSMEs defines MSMEs based
on three main criteria: the number of assets, sales turnover, and the number of employees.
34
MSMEs are divided into three categories: micro, small, and medium, with different asset
and sales turnover limits for each category. This law also provides a framework for special
treatment and support for MSMEs, including taxation, credit, and other assistance to
facilitate the growth and development of MSMEs in Indonesia.
According to Bank Indonesia, the definition of MSMEs is that small businesses are
productive businesses owned by Indonesian citizens, which can take the form of individual
businesses, non-legal entity businesses, or legal entity businesses such as cooperatives. These
businesses do not have affiliations as subsidiaries or branches of medium or large
enterprises, either directly or indirectly.
35
Referring to various definitions, it can be understood that MSMEs refer to micro,
small, and medium enterprises that play an important role in the economy. Generally,
MSMEs are considered productive businesses owned by citizens, with various business
entities such as individuals, non-legal entities, or legal entities like cooperatives. It is also
emphasized that MSMEs do not have direct or indirect affiliations with medium or large
enterprises. This view provides a comprehensive understanding of MSMEs as economic
drivers that can significantly impact inclusive economic growth and development, especially
in Indonesia. As explained by Rujito in Irawati, MSMEs are one type of business that
significantly influences Indonesia's economy, both in terms of the number of businesses
formed and the number of jobs created.
36
The common classification of MSMEs is based on the size of the business scale. The
scale of a business can be measured through various factors, including net income, the
number of employees, and the business capital owned. This perspective is reflected in the
grouping of MSMEs conducted by institutions such as the World Bank and the Central
Statistics Agency (BPS). They divide MSMEs into three main categories: micro enterprises
with a maximum of 10 employees, small enterprises with up to 30 employees, and medium
enterprises with up to 300 employees. Meanwhile, the Ministry of Cooperatives and SMEs
and the Minister of Finance's Decree refer to the classification of MSMEs based on the
amount of capital and wealth owned by the business owners.
37
33
Heru Irianto et al., Kinerja Usaha Mikro Kecil dan Menengah (UMKM) Pangan (Surakarta: Cv.
Indotama Solo, 2021), hlm. 7.
34
Nur Syamsiyah, Annisa Martina Syahrir, and Is Susanto, “Peran Koperasi Syariah Baitul Tamwil
Muhammadiyah terhadap Pemberdayaan Usaha Kecil dan Menengah di Bandar Lampung,” Al Amin: Jurnal
Kajian Ilmu dan Budaya Islam 2, no. 01 (August 27, 2019): hlm. 67, https://doi.org/10.36670/alamin.v2i1.17.
35
Irma Herliza Rizki et al., UKM Mandiri di Era Revolusi Industri 4.0 (Serdang: Cattleya Darmaya
Fortuna, 2022), hlm. 4.
36
Siti Anugrahini Irawati, Ekonomi Kreatif dan UMKM Kuliner Pendongkrak Ekonomi Rakyat (Malang:
Media Nusa Creative (MNC Publishing), 2023), hlm. 26.
37
Musran Munizu et al., UMKM : Peran Pemerintah dalam Meningkatkan Daya Saing UMKM di Indonesia,
(Jambi: PT. Sonpedia Publishing Indonesia, 2023), hlm. 16-17.

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Regarding various opinions, MSMEs are generally divided into three categories based
on criteria such as the number of employees, sales turnover, and asset value.
38
Micro
enterprises are the smallest, with very few employees and limited turnover, often with assets
up to IDR 50 million or a turnover of up to IDR 300 million. Small enterprises have a
moderate scale with a larger number of employees, turnover, and asset value, typically with
assets up to IDR 500 million or a turnover of up to IDR 2.5 billion. Meanwhile, medium
enterprises have an even larger scale with a significant number of employees, turnover, and
asset value, typically with assets up to IDR 10 billion or a turnover of up to IDR 50 billion.
This classification helps the government provide appropriate support and understand the
roles and contributions of various MSMEs to the economy.
METHOD
This study is a field research, which means it was conducted in real-life settings.
39
The
approach used is qualitative research, a process of inquiry and understanding based on
methodologies investigating a social phenomenon and human problems.
40
In this
approach, the researcher creates a complex picture, studies words, provides detailed reports
from respondents' viewpoints and conducts studies in natural settings.
The informants in this research include all local government officials responsible for
implementing community economic empowerment and all MSMEs actors participating in
financial empowerment. The selection of informants employed a probability sampling
design with a cluster sampling area technique, considering the vast area being studied.
41
Informants were chosen purposively (purposive sampling) from the regions of Bandar
Lampung City, Metro City, Pringsewu Regency, Tanggamus Regency, and Central
Lampung Regency, with a total of 143,742 MSMEs. Data collection methods used include
observation, interview, and documentation methods. The data analysis employed is
qualitative analysis, which is then presented descriptively. Conclusions are drawn using a
deductive reasoning approach, which involves analyzing data generally and then deriving
specific findings from the general data points.
42
FINDINGS AND DISCUSSION
A. Improvement of the Welfare of SMEs Affected by Covid-19 through the Community
Economic Development Approach in Lampung Province
Development and empowerment share the same meaning in encouraging or
motivating, guiding, and assisting in independently increasing the capabilities of
individuals or communities. This research was conducted to observe changes referring to
social changes. The social changes referred to here are changes from a previously powerless
38
Baca lebih lanjut dalam Rosna Dewi, “Dampak Pandemi Covid-19 Terhadap Kelangsungan UMKM
(Usaha Mikro, Kecil Menengah) Di Kabupaten Sidoarjo,” Jurnal Mitra Manajemen 6, no. 5 (August 31, 2022):
hlm. 275; Bandingkan denggan Tasya Vernanda, Patricia Dhiana Paramita, and Rita Andini, “Pengaruh Skala
Usaha dan Penggunaan Sistem Informasi Akuntansi terhadap Keberhasilan UMKM Dimoderasi Motivasi
Pelaku UMKM (Studi Kasus: UMKM Pengrajin Kulit di Tanggulangin Sidoarjo),” Journal Of Accounting 9,
no. 1 (June 30, 2023): hlm. 7.
39
Kartini Kartono, Pengantar Metodologi Riset Sosial, Cet. Ke-12 (Bandung: Mandar Maju, 2006), hlm.
32.
40
Mukhtazar, Prosedur Penelitian Pendidikan, (Yogyakarta: Absolute Media, 2020), hlm. 15.
41
Masayu Rosyidah and Rafiqa Fijra, Metode Penelitian, (Sleman, Yogyakarta: Deepublish, 2021), hlm.
17.
42
Sutrisno Hadi, Metode Research II, (Yogyakarta: Andi Offset, 2012), hlm. 28.

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DOI: 10.22373/al-ijtimaiyyah.v10i1.24031
and undeveloped community to one that is empowered and developed, and examining
their previous capabilities by looking at the impact of the Covid-19 disaster on SMEs in
Lampung concerning their ability to meet their livelihood needs.
Referring to the results of observations and interviews conducted by the authors, data
was found showing that SMEs in Lampung Province felt a significant impact from the
Covid-19 pandemic. These impacts include 1) decreased sales due to reduced community
activities outside as consumers; 2). Difficulties in capital due to decreased sales levels
resulting in slow capital turnover; 3). Restrictions on movement in product distribution in
certain areas, hindering product distribution; 4). Difficulties due to dependency on raw
materials from other industrial sectors.
Interviews with various local government officials revealed that in addressing the
impact of Covid-19 on SMEs, the Lampung provincial government implemented a
community economic development approach. The measures include training or workshops
and providing additional capital to SMEs committed to developing their businesses. The
process can be explained as follows:
1. Training Stage
Referring to the previous theory that every step in the community economic
development approach program starts with a training session, this practice is implemented
to increase SMEs' capacity as the program's main recipients. The training program aims to
expand development capacity, enhance understanding of entrepreneurship, and improve
skills in creating local products such as culinary items, crafts, and other skills.
Training was conducted over two days at the homes of SME operators, and this
activity was open to all interested SMEs. Two different resource persons were responsible
for the first and second days. During the training, participants were provided with two
material sessions. The first session involved direct training or practice, such as making
crafts, food, and other skills. This aligns with explanations from informants working at the
Department of Cooperatives and SMEs in several districts and the experiences of some
training participants.
One of the goals of the community economic development approach program is to
find solutions to revitalize the local economy, reduce poverty through training and job
creation, and involve the community and local stakeholders in the process. This approach
was adopted by various regional government agencies in Lampung Province through
relevant departments to address the impact of Covid-19 on SMEs in Lampung Province.
2. Business Capital Addition
Adding business capital is also crucial in implementing the community economic
development approach for SMEs in Lampung Province. Before the Covid-19 pandemic,
capital addition was carried out in each cycle of the community economic development
program implementation, which was conducted every 4 to 5 months at several points for
SMEs in Lampung Province through relevant departments. This capital addition is a
revolving fund from one participant to another. Each participant is given a loan of two to
four million rupiahs for new and existing participants in the community economic
development program.
The revolving fund loan program is expected not to burden training participants
during the loan repayment. The program manager stated: "The revolving fund loan
program has actually been running for quite a long time, even before the Covid-19
pandemic. This loan is given to business actors who need additional capital, with

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repayments made in installments every cycle, around every 4 months. Generally, the funds
are fully collected during the next training period, and will be given to training participants
who need additional capital".
Economic empowerment through the community economic development approach
gives SME actors the opportunity to build or continue and develop their businesses
individually or in groups to achieve desired results. Before borrowing capital, each SME
actor, whether individual or group, must explain the type of business they want to run or
are running, and provide reasons for the capital addition.
Additionally, field data findings indicate that these data essentially reflect the steps
and results of economic empowerment through the community economic development
approach to improve the welfare of SMEs affected by Covid-19 in Lampung Province. The
author's analysis, referring to existing theories, shows that the program goes through at least
four stages: planning, implementation, institutionalization, and monitoring or evaluation.
These stages can be explained as follows:
1. Planning Stage
Planning involves steps in setting organizational goals, designing strategies to achieve
those goals, and preparing organizational activity plans.
43
Planning is considered the most
crucial process of all management functions because without planning, other functions
such as organizing, directing, and controlling cannot be effectively carried out.
44
The
planning stage for the community economic development approach for SMEs affected by
Covid-19 in Lampung Province is carried out through the introduction and problem
identification stages.
The introduction stage is a process to understand and become more familiar with the
situation, conditions, and social relationships within. This stage shows a deeper mutual
understanding of the phenomena and situations experienced by a region. In this stage, the
local government implementing community economic development conducted an
environmental analysis to determine the desired programs by SMEs. Indicators found from
field research show that one of the problems for SMEs in Lampung Province is financial
issues, where during the Covid-19 pandemic, SMEs in Lampung Province experienced a
decline in income, while expenses remained, causing an imbalance between income and
expenses. This is explained by the community economic development program
implementers in Bandar Lampung City, Metro City, Pringsewu Regency, and Central
Lampung Regency, who have conducted discussions with SMEs, sharing solutions to
existing problems, especially related to capital, assistance, and other issues.
Next is the problem identification stage, which determines the program to be formed
in the community. Its purpose is to produce program outputs based on participation and
cooperation. According to research data, the problem identification related to the
implementation of the community economic development program includes family
financial issues, lack of education and skills, and having businesses to address income
problems. Field data show that problems for SMEs in Lampung Province are financial
43
Naim Arshi and Devi Ajantha V., Global Applications of the Internet of Things in Digital Marketing
(Hershey, Pennsylvanie: IGI Global, 2023), hlm. 237; Lihat juga dalam Kaul Kumar Vijay, Principles and
Practices of Management, First Edition (New Delhi: Vikas Publishing House, 2015), hlm. 11.
44
Neil Snyder and William F. Glueck, “How Managers Plan—the Analysis of Managers’ Activities,”
Long Range Planning 13, no. 1 (February 1, 1980): hlm. 70-76, https://doi.org/10.1016/0024-6301(80)90058-
8.

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issues, education, and skills, especially after the Covid-19 pandemic spread across various
regions in Lampung. This data is reinforced by interviews with various SMEs in Lampung
Province.
Referring to the various explanations, the author believes that the planning process
carried out by the local team in implementing community economic development is
detailed and comprehensive, starting from the introduction to problem identification
stages, where cooperation and sharing solutions are evident from the efforts made by
various parties. The planning stage for implementing the community economic
development program is well-directed, ensuring the continuation of subsequent stages for
the economic assistance program for SMEs in Lampung Province, aiming to improve their
welfare.
2. Implementation Stage
The implementation stage is the most important in community empowerment and
assistance programs.
45
Well-planned programs can falter in execution if there is no
cooperation among various parties, including local governments, SMEs, and among SMEs
themselves. This cooperation has been undertaken by various parties in implementing the
community economic development program. For example, assistance for SMEs in
Lampung Province has been carried out by several parties. Besides the Department of
Cooperatives and SMEs in Bandar Lampung City, several universities have collaborated
and provided assistance to SMEs in Lampung Province, such as Bank Indonesia in
cooperation with Lampung State Polytechnic in implementing SME onboarding in
Lampung Province. In this activity, Eko Win Kenali, the head of the activity, explained that
it consisted of several stages, including an education stage attended by 50 SMEs, followed
by assistance and monitoring for SMEs.
Lampung State Polytechnic also provided assistance for content marketing
optimization to increase sales turnover for SME groups. This activity was carried out by
lecturers and students of Lampung State Polytechnic for SMEs under the guidance of Bank
Indonesia. The assistance aimed to help SMEs increase their turnover, especially after the
Covid-19 pandemic impacted SMEs income. Similarly, the Palm Oil Plantation Fund
Management Agency (BPDPKS) collaborated with the Ministry of Finance Lampung in
sustainable SMEs empowerment.
Each stage of the community economic development program begins with training
sessions aimed at developing the capacity of SMEs as the main participants of the program.
Training focused on practical and theoretical materials is expected to be implemented by
community economic development participants. This practical training aims to motivate
SMEs who are still uncertain about their businesses, providing new enthusiasm for SMEs
participants. The purpose of business training is to develop motivation, knowledge, skills,
experience in running small businesses, or having small home industries and teamwork for
mutual support.
3. Institutionalization Stage
The institutionalization stage is a specific phase aimed at building aspects of
independence or sustainability. The community economic development program is clear,
45
Arie Eko Cahyono et al., “Community Empowerment Models of Tourism Village Based on Superior
Commodities: Realizing Economic Resilience,” Journal of Distribution Science 16, no. 11 (2018): hlm. 29-36,
https://doi.org/10.15722/jds.16.11.201811.29.

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measurable, and planned, ensuring continuity rather than stopping at a certain point.
Sustainable economic empowerment and development programs will build community
independence and increase productivity.
Actions taken in implementing the community economic development program in
Lampung Province for SMEs include strengthening human resources (HR) and establishing
partnerships. Strengthening local institutions can be done through HR development as
program managers. This has been carried out in the community economic development
program for SMEs affected by Covid-19 in Lampung Province, such as improving capacity
building, leadership, business knowledge, and financial bookkeeping for SMEs.
4. Evaluation Stage
Evaluation can be conducted on the processes and outcomes of the community
economic development program for SMEs post-Covid-19 in Lampung Province. This
means it can be carried out at certain times and ultimately on the ongoing process. The
goal of evaluating the community economic development program for SMEs in Lampung
Province is to determine the extent to which the objectives have been achieved, identify the
hindering and supporting factors, and decide what steps need to be taken to improve the
program.
In the context of the community economic development program approach for SMEs
affected by Covid-19 in Lampung Province, the evaluation process and implementation
involve discussions, opinion polls, and sharing sessions among SME actors. To measure
the success of the SMEs participating in the community economic development program,
discipline in attending training and mentoring sessions, and the growth of their businesses
post-training and mentoring, are considered. The evaluation process for the community
economic development program is very detailed and clear, though in technical stages,
further evaluation and development may still be necessary. Evaluating the success of
participants is also very clear, such as through awarding and providing additional capital
for those who wish to expand their businesses further. This has been implemented by the
local government of Lampung Province to ensure the sustainability of business
development for SMEs in Lampung Province.
Furthermore, the author describes economic empowerment through the community
economic development approach for SMEs actors in Lampung Province as follows:
Tabel 1.
The Community Economic Development Approach for SMEs Actors.
Stage of Community
Economic Development
Field Problems
Solutions Implemented
Planning Stage
1. Financial issues
(capital)
2. Income decline
3. Family finances
4. Lack of education
1. Situation introduction
2. Problem identification
3. Solution-sharing
discussions
4. Participation and
collaboration
5. Revolving loan capital
Implementation Stage
1. Lack of skills
2. Lack of cooperation
3. Low motivation to grow
1. Cooperation between
parties
2. Collaborative mentoring

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4. Low sales turnover
3. Conducting education,
training, and workshops
4. Optimizing content
marketing
Institutionalization Stage
1. Low productivity
2. Inadequate human
resources
3. Poor business
operations and
financial bookkeeping
1. Institutionalization for
independence and
sustainability
2. Strengthening human
resources in business
management
3. Building local partnerships
Evaluation Stage
1. Difficulty in collecting
business progress data
2. Limited knowledge of
HR on evaluation
3. Limited time and focus
4. Limited external support
1. Discussions, polls, and
sharing
2. Explanation of evaluation
goals, methods, and details
3. Corrective actions and
further development
4. Awards and additional
support
5. Support and commitment
to continuing the program
Source: Processed data from interviews, December 2023.
In Addition to Various Stages in the Implementation of the Community Economic
Development Program for MSMEs Affected by Covid-19 in Lampung Province, it should
also be illustrated here that the community economic development program approach is
quite effective in the economic recovery of MSMEs in Lampung Province affected by Covid-
19. This is evident from the field data obtained, which shows three major points from the
results of economic empowerment through the community economic development
program for MSMEs in Lampung Province. These points are that MSMEs actors who have
participated in the community economic development program have gained self-
confidence, changed their family economic sources, and fostered family economic
independence.
Self-Confidence Aspect, The results of the businesses run by MSMEs participants in
the community economic development program have enabled each participant to change
their behavior and gain strong self-confidence. The money earned can solve family
economic problems, at least they no longer depend on assistance from the government or
other parties to meet their family's needs.
Change in Family Economic Sources, In the aspect of changing family economic
sources, it is evident that economic empowerment through the community economic
development program for MSMEs in Lampung Province has brought significant positive
benefits for MSMEs actors. This program enables MSMEs actors to become economically
independent by enhancing their business activities, thereby stabilizing their economy.
Therefore, the community economic development program can support MSMEs actors in
fulfilling their need for alternative income after being affected by Covid-19.
Family Economic Independence Aspect, Through the community economic
development program approach for MSMEs in Lampung Province, opportunities can be
opened for participants of this program to become agents of change in their daily lives, to
become disciplined and responsible in running their business activities. The results of

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empowerment and development carried out through the community economic
development program for MSMEs affected by Covid-19 can be seen from family economic
independence. This family economic independence is evident from the increased
productivity and income within the family and the ability of MSMEs actors to prioritize
their family's needs. Here, besides increasing productivity, MSMEs actors can prioritize the
most important needs first and then fulfill the subsequent needs.
B. Increased Welfare of MSMEs Actors Affected by Covid-19 through the Community
Economic Development Approach in Lampung Province from the Perspective of
Islamic Economics
Based on the analysis and studies conducted, the author concludes that the
community economic development program aims to guide and support MSMEs actors in
Lampung Province affected by Covid-19 in obtaining information, knowledge, skills, and
additional capital that are useful for their livelihoods, or in other words, to help vulnerable
groups to have the strength (ability) to meet their basic needs so that they do not live in
deprivation. Empowerment through training activities is an effort to increase the
knowledge and creativity of MSMEs communities and to improve the economy of MSMEs
actors as the ultimate goal of this approach.
According to the perspective of Islamic economics, economic activities serve not only
as a means of meeting worldly needs but also have a spiritual dimension in the hereafter.
Human economic actions are not limited to the physical development of individuals,
communities, and groups but also emphasize the importance of developing other integral
aspects to achieve a life of justice and happiness.
46
Humans have the freedom to engage in
various economic activities as long as they comply with the principles of Islamic law. In the
Islamic view, economic activities must be conducted carefully and based on Islamic moral
and economic values, as well as following the guidance found in the Qur'an and Sunnah
as the foundation of Islamic life.
Based on the author's analysis, it can be concluded that the community economic
development program approach for MSMEs actors affected by Covid-19 in Lampung
Province is essentially in line with the basic values of Islamic economics. These basic values
serve as guidelines in designing and implementing community economic development
programs. The basic values of Islamic economics referred to are: the Value of Divinity
(Ilahiah), the Value of Justice, and the Value of Ta'awun.
47
The value of Divinity is instilled by upholding the values of truth, honesty, courage,
and consistency in truth. The development of the community economic development
program for MSMEs actors affected by Covid-19 in Lampung Province not only includes
skills and expertise in business activities but also instills the principle of Divinity where
honesty in carrying out activities and openness among fellow MSMEs participants and
related stakeholders is emphasized. The development of the community economic
development program also instills in MSMEs actors in Lampung Province the principle of
working as hard as possible and entrusting everything to Allah Swt., because they believe
that everything on earth belongs to Allah Swt., humans are only entrusted with and used
46
Hanif and Is Susanto, “Consumerism Culture of Urban Communities Based on Islamic Economic
Perspective,” Agregat: Jurnal Ekonomi Dan Bisnis 4, no. 1 (July 7, 2020): hlm. 83-99,
https://doi.org/10.22236/agregat_vol4/is1pp83-99.
47
Abdul Latif, “Nilai-nilai Dasar dalam Membangun Ekonomi Islam,” Diktum: Jurnal Syariah Dan
Hukum 12, no. 2 (July 16, 2014): hlm. 164, https://doi.org/10.35905/diktum.v12i2.211.

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as much as possible for the common good and always strive to ask Allah SWT. to provide
for their sustenance.
Similarly, the concept of the value of Justice has been instilled in the community
economic development program for MSMEs actors affected by Covid-19 in Lampung
Province. Planting the value of justice has become part of strengthening the understanding
of MSMEs actors in the business activities they carry out, and this value of justice is evident
from the collaboration among MSMEs actors in developing their understanding and skills
as participants in the community economic development program. The values of justice are
also evident from the collaboration between program resource persons and MSMEs actors
as participants in the program.
Meanwhile, the value of Ta'awun is evident from the involvement of the government
in implementing the community economic development program for MSMEs actors
affected by Covid-19 in Lampung Province, where the government cooperates with various
agencies and stakeholders to implement the program. In addition, the involvement of the
government can also be seen from efforts to provide assistance, albeit not maximally, as
business capital to increase the production of MSMEs actors, which is one form of religious
recommendation that must be improved because it is one of the obligations of the state in
Islam. Providing guidance is also something that must be done to improve the
professionalism of MSMEs actors in facing the impact of Covid-19 in Lampung Province.
Islam encourages its followers to produce and participate in various forms of
economic activities, including agriculture, horticulture, fisheries, industry, and trade.
MSMEs are productive economic activities that stand alone, conducted by individuals or
business entities that are not subsidiaries or branches of companies owned, controlled, or
directly or indirectly part of medium-sized enterprises. And to help improve the economy
for MSMEs using the community economic development approach is not prohibited,
because its goal is in line with Islam itself, namely to equalize the welfare of humanity. The
community economic development approach also applies in accordance with Islamic
principles so that in human life, there is mutual recognition and mutual assistance through
partnership. Islam commands humans to cooperate in all matters, and likewise, the
community economic development approach.
CONCLUSION
The results of this study indicate that the improvement of the welfare of MSMEs
communities affected by Covid-19 through the community economic development
approach in Lampung Province has been implemented in accordance with the process
outlined in the theory of community economic development through four stages: the
planning stage, the implementation stage, the institutionalization stage, and the evaluation
stage. From the perspective of these processes, the community economic development
program has successfully executed each stage, thus far considered capable of addressing the
challenges faced by MSMEs actors in Lampung Province. The community economic
development approach is deemed more effective, as the program has been widely felt by
MSMEs actors participating in it. These actors have successfully cultivated creativity,
confidence, discipline, and optimism, thereby improving their family's economy.
Meanwhile, from the perspective of Islamic economics, the community economic
development approach is not contradictory and has been implemented in accordance with
the values of Islamic economics, consisting of the values of Divinity, justice, and
cooperation.

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