Reconstructing the role of pawnshop institutions in supporting MSMEs and the people’s economy: A critical review and an implementative financial inclusion model
DOI:
https://doi.org/10.61511/ghde.v2i2.2025.3330Keywords:
critical literature review, financial inclusion, MSMEs, P3-UMKM, PegadaianAbstract
Background: Micro, Small, and Medium Enterprises (MSMEs) are a key pillar of the people’s economy but continue to face structural financial exclusion due to rigid requirements and collateral-based conventional financing. Existing literature predominantly frames Pegadaian (pawnshops) as an emergency liquidity provider or residual institution, limiting its recognized role in sustainable MSMEs empowerment and inclusive economic development. This study aims to reconstruct Pegadaian’s role within the financial inclusion ecosystem through critical synthesis and model development. Methods: A qualitative, reconstructive, and normative Critical Literature Review was conducted. From 1,365 articles identified in Scopus and Google Scholar. 20 studies were selected through a four-stage qualitative PRISMA adaptation (identification, screening, eligibility assessment, and inclusion), applying criteria of MSMEs relevance, non-bank financing focus, policy implications, methodological adequacy, and conceptual contribution. Analysis employed conceptual mapping, literature quality assessment, thematic analysis, and cross-context critical synthesis grounded in financial inclusion, institutional economics, social capital, and the people’s economy. Findings: The review reveals four dominant patterns: persistent conceptualization of Pegadaian as an emergency liquidity institution, methodological fragmentation with limited longitudinal perspectives, weak integration between financing, financial literacy, and business ecosystems, and the absence of implementative models applicable to MSMEs. However, the literature indicates Pegadaian’s potential to evolve into a more adaptive, value-based, and empowerment-oriented financial inclusion institution. Conclusion: This study concludes that the P3-UMKM model provides a robust and scalable framework to reposition Pegadaian as an Inclusive Development Finance Institution by integrating innovative financing, capacity building, hybrid digital–physical service delivery, and impact-oriented governance. Novelty/Originality of this article: The study’s novelty lies in the P3-UMKM Model as a coherent and implementable framework that systematically integrates productive financing, financial literacy, digitalization, and value-based governance to support inclusive and sustainable MSMEs development in Indonesia.
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