Present Problem Faced by Indian Exporter Essays and Term Papers

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Delhi Business Review X Vol. 10, No. 2 (July - December 2009)

PROBLEMS FACED BY SMALL AND MEDIUM BUSINESS IN EXPORTING PRODUCTS Siringoring Hotniar Sirin g orin g o* Prihandoko** Dharma Tintri*** Anacostia Kowanda****

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HE objective of this research is to identify and analyze the problems faced by exporters in conducting product export. Unit analysis is limited to Small and Medium Enterprises (SMEs) considering that they lack resources compared to big enterprises.

Since the problem is subjective in perception, questionnaire is used as the research instrument. Questionnaire was distributed to companies and was filled by their staff who is responsible to handle exporting activities. Data collected was then analyzed by using statistics tool, in order to verify the factors which influence the export problems significantly. The result of the survey shows that the factors which influence SME’s export performances in Indonesia are competition, long duration of export document process, product quality, export barrier from country destinations, low capability in high production, delay in transportation, communication barrier, government agencies that presume become barrier, lack of international market knowledge, barrier of entering international market, export administrative procedures, inefficient production cost, unofficial fee in export documents processing, incapable to supply product in time, lack of knowledge in transaction method, limitation of destination country, time limitation in cargo, and delay of shipping. As can be seen, the cause of some of export barriers is because of human knowledge as well as government authorities and agencies. The most important factors considered to overcome the barriers is to equip SME’s management with training and information. Key Words: Exporting Problems, Entrepreneurs, Micro Business, Small Business, Medium Business.

Introduction
Based on their earnings and capability in facing economic crisis, Small and Medium Enterprises (SMEs) show better performance than that of big enterprises. There are plenty of SME business units still obtained high profit though the economic rate reached minus thirteen point four percent (-13.4%) in 1998 causing the number of SME business units decrease at two point ninety five million business units (BPS, 2001) The 6 years time since Indonesia fell into economic crisis is a suitable moment to see the strength of SME. It provides evidence that SME has a strong capability to adapt to the critical business situations * Lecturer, Gunadarma University, Jl. Margonda Raya No. 100 Depok 16424, West Java Indonesia. * * Lecturer, Faculty of Economics, Gunadarma University, Jl. Margonda Raya No. 100 Depok 16424, West Java Indonesia. *** Lecturer, Gunadarma University, Jl. Margonda Raya No. 100 Depok 16424, West Java Indonesia. **** Lecturer, Gunadarma University, Jl. Margonda Raya No. 100 Depok 16424, West Java Indonesia. 49

Hotniar Siringoringo, Prihandoko, Dharma Tintri and Anacostia Kowanda and survive in running their businesses. A significant role of government policies in assisting SME is also important to be noticed. On March 2002, government released an economic policy package focusing on four strategies, i.e., to give a good and easy service to SME, restructuring SME, to open a special window of banking system for SME, and human resource development for SME. Unfortunately, this program cannot run by itself without any involvement from others such as university, department of industry and trade, state-owned corporation, department of cooperation and SME. We can notice from the strategies formulated above, there’s no strategy toward marketing aids, especially to help SME to be able to penetrate abroad market. Abroad market means export activity. Exporting of course will rise SME earning. Indonesian trading activities with other countries require handling export documents accurately, and fast. For big enterprises, handling export documents...
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