Determinants of Loan Access towards Financial Performance in MSMEs

Abstract

Low competitiveness is one of the obstacles to improving the performance of MSMEs. One of the factors that cause this is the lack of access for MSMEs to financial institution facilities. This study aims to analyze the financial performance of MSMEs seen from the accessibility factor to financial facilities provided by various financial institutions in Tasikmalaya City. The study used a quantitative descriptive method. Data analysis used the PLS Structural Equation Model (PLS-SEM). The sample consisted of 100 SMEs in the creative economy sub-sector through the random sampling method. The analysis technique uses a path analysis model to see the causal relationship between variables, either directly or indirectly. Data were obtained through direct interviews with SMEs using closed questionnaires. The results show that management administration has a direct or indirect effect on financial performance. The management of administration is important to improve accessibility to the financial performance of MSMEs. Guidance for MSMEs is needed to ensure that loans can be utilized optimally for business development.

Some Factors Affecting the Financial Performance of Small and Medium Enterprises (SMEs) in the Kingdom of Saudi Arabia

“…Financing companies are business entities outside the banking channel and non-bank financial institutions are specifically established to carry out activities that are included in the business field of the institutional financing. Ease of access to financing is closely related to the financial performance of SMEs (Maesaroh, 2021).…”

“…Moreover, the study also recommends government to offer incentives and funding to SMEs at a lower cost to boost their financial performance. Maesaroh (2021) study opines that SMEs need funding assistance in order to develop their businesses and enhance their performance. SMEs also need help to properly manage their borrowed funds.…”

Қазақстан Республикасындағы Экономиканың Нақты Секторы Және ШОБ Субъектілері Үшін Банктік Несиелердің Қолжетімділігін Бағалау

“…Авторлар (Андерс, Андреас, 2020) шағын және орта бизнес үшін несиелік шектеулер және осындай бизнесті несиелендірудегі мемлекеттік банктердің рөлі туралы зерттеу жүргізді. Өз кезегінде, зерттеу (Maesaroh, 2021) бизнестің тиімділігі мен дамуын арттыру үшін ШОБ субъектілерін қаржылық және несиелік қолдау қажеттілігін эксперименталды түрде растайды. Зерттеушілер (Karna, Stephan, 2022) несиелердің фирманың өсуіне әсер етуінің әзірленген үлгісіне субъектінің орналасқан жерін енгізді, бұл олардың ірі қалалардан қашықтықтағы ШОБ үшін несие шектеулерін азайту қажеттілігі туралы гипотезасын растады.…”

Does Asymmetric Information Perception Relate to MSMEs’ Access to Banking Credit?

“…Twumasi et al [33] added that access to financial services is an important factor in explaining how financial literacy affects household income. MSMEs are currently underutilized in terms of access to financial services, particularly banking credit [2]. This is due to the difficulties that MSMEs face in obtaining these loans.…”

“…MSMEs have been identified as critical to economic development in both developed and developing countries. MSMEs, on the other hand, face numerous challenges to their expansion and growth [2]. According to the literature, a lack of finance is a significant constraint that SMEs face in any region of the world [3], as they require financial resources that match their characteristics to fill the financing gap [4].…”