Bridging the Micro Small Medium Enterprises financing gap through gold pawn financing: A market sizing analysis of household gold potential in Indonesia

Abstract

Background: Indonesia's MSMEs face a persistent financing gap estimated at IDR 2,400 trillion, despite sizeable household gold assets that remain underutilized as productive financing collateral. This study quantifies the contribution potential of gold pawn financing to MSME funding through an integrated TAM–SAM–SOM market sizing framework combined with financing gap and strategic gap analysis. Methods: Using a quantitative descriptive approach, this research relies on secondary data and applies market sizing calculations, financing gap comparison, sensitivity and scenario analysis, and strategic gap analysis. Findings: TAM reaches IDR 212.28 trillion (8.8% of the financing gap); the realistically obtainable SOM is IDR 8.49 trillion (0.3%). Sensitivity analysis identifies market capture as the most critical parameter, outweighing gold ownership rates and LTV ratios. Strategic gap analysis reveals three limiting dimensions: functional orientation, institutional capacity, and policy direction. Conclusion: The study concludes that gold pawn financing holds strategic value as a complementary financing instrument for MSMEs, but its effectiveness depends on clearer policy alignment and product design explicitly oriented toward productive use. Novelty/Originality of this article: The originality of this study lies in its integrated framework combining market sizing, financing gap analysis, and strategic gap assessment to quantitatively and policy relevantly evaluate the role of gold pawn financing in MSME development.