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Circular Economy-Based Msme Business Model Development: Piloting In Several Bi’S Representative Office

Author

Listed:
  • 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)

  • Rudy Marhastari

    (Bank Indonesia)

  • Dila Safitri

    (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.

Suggested Citation

  • 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 Marha, 2025. "Circular Economy-Based Msme Business Model Development: Piloting In Several Bi’S Representative Office," Working Papers WP/11/2025, Bank Indonesia.
    • Handle: RePEc:idn:wpaper:wp112025
    as

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    File URL: https://publication-bi.org/repec/idn/wpaper/WP112025.pdf
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    References listed on IDEAS

    as
    1. Peterson K. Ozili, 2021. "Circular Economy, Banks, and Other Financial Institutions: What’s in It for Them?," Circular Economy and Sustainability, Springer, vol. 1(3), pages 787-798, November.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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