The Implementation of MSME Upgrades and Its Stages in Pajajar Village, Majalengka Regency

Abstract

Background. Micro, Small, and Medium Enterprises (MSMEs) are the backbone of Indonesia's economy, absorbing around 119 million workers and contributing more than 60% of the national Gross Domestic Product (GDP), but the structure of MSMEs is still very unequal because micro enterprises dominate up to 99.70% of the total business units (UKMINDONESIA.ID, 2026). This inequality makes the agenda of "upgrading"—increasing business capacity from micro to small and medium—a policy priority of the Ministry of Cooperatives and SMEs.

Objectives. This research is part of a series of literature reviews on Pajajar Village, Rajagaluh District, Majalengka Regency, which has previously discussed waste bank institutions, the application of waste management technology, and food security at the household level; this study expands the study to the realm of strengthening the local economy through upgrading MSMEs and its stages of implementation.

Methods. The method used was a descriptive-qualitative literature review by examining the MSME policy framework for upgrading classes, cluster models and MSME assistance, the concept of One Village One Product (OVOP), as well as national scientific journal articles on marketing digitalization (marketplace and QRIS) and business legality (NIB, halal certification, and PIRT). The results of the study formulated a four-stage model of MSMEs upgrading for Pajajar Village—pioneering and legality, digitalization and marketing, standardization and certification, and upgrading and expansion—which were synthesized from the Go Legal-Go Digital-Go Bankable-Go Global framework.

Results. This study also synthesizes the relationship of MSMEs upgrading with the results of the previous three literature reviews, showing that compost, compost, and yard crops can be processed into value-added MSME products which are then marketed digitally, forming a circular waste-food-MSME economic value chain at the village level.

Conclusion. This study recommends that the Pajajar Village Government start the pilot stage of business legality collectively through cooperatives/BUMDes, while still considering the potential of circular economy educational tourism as an added value for village MSMEs.