Transformation of MSME Legality Through Business Identification Numbers (NIB): It’s Impact on Competitiveness and Consumer Trust in Sungai Nangka Urban Village, South Balikpapan

Transformasi Legalitas UMKM melalui NIB: Dampaknya Terhadap Daya Saing dan Kepercayaan Konsumen di Kelurahan Sungai Nangka, Balikpapan Selatan

Abstract

Micro, Small, and Medium Enterprises (MSMEs) play an important role in supporting community economic activity, including at the urban village level. However, the development of MSMEs is often constrained by limited understanding of business legality and the procedures for obtaining a Business Identification Number (Nomor Induk Berusaha/NIB). NIB is an important component of business legality within Indonesia's risk-based business licensing system and functions as an official identity for business actors. This community service activity was carried out in Sungai Nangka Urban Village, South Balikpapan, through education, socialization, and assistance in obtaining NIB for local MSME actors. The activity aimed to increase MSME actors' understanding of business legality while encouraging them to recognize the relationship between formal legality, business competitiveness, and consumer trust. The implementation method consisted of initial identification, socialization, direct assistance, and evaluation of participants' understanding. The results showed that the assistance provided helped MSME actors understand the importance of business legality and the role of NIB as an initial foundation for developing their businesses. NIB ownership can also strengthen the professional image of MSMEs, increase opportunities to participate in formal economic activities, and provide consumers with greater confidence in the existence and legitimacy of a business. Therefore, strengthening MSME legality through NIB should not be viewed merely as an administrative obligation, but as part of a broader transformation toward more competitive, trusted, and sustainable MSMEs at the community level.