Financial Inclusion and Performance to Mediate the Effect of Banking and Tax Regulation on the Success of Small and Medium Enterprises in Indonesia

Abstract

The census sampling technique method was used. The population is amounted to 76 batik business actors. The method of analysis is Wrap-PLS 5.0. Findings: The results showed tha implementation of banking and tax regulation for small and medium business actors has a number of positive consequences to success of the business involved. Among them regulation of banks through the determination of rate interest on credit, the ease of credit application and the speed of credit process supported by good business management and financial knowledge (financial inclusion) is a good determinant factor in increasing capital, business scale, profit and business management. Tax regulation through the determination of tax rate, ease of tax access, simplification of tax procedure and transparency regarding taxes supported by good business management and financial knowledge (financial inclusion) become the determinant factor in increasing capital, business scale, profit and business management. Practical implications: The results are interesting from the theoretical and practical aspect to be applied for the financial inclusion. Originality/Value: The paper contains a formalized approach to the success of Small and Medium Enterprises in Indonesia.

Determinant factor of Islamic financial inclusiveness at MSMEs: Evidence from Pekanbaru, Indonesia

“…The results of his study showed that easy access to credit for farmers greatly helped them in managing their tea plantations. The same finding was made by Riwayati (2017), where SMEs in Indonesia that can improve the quality of financial inclusion, are successful in developing their business. This study was corroborated by Fan andZhang (2017), andYaumidin et al (2017).…”

“…World Bank emphasizes that inclusiveness of MSMEs in the formal financial institutions is important for them because it can foster the growth of MSMEs (World Bank, 2014). Empirical study shows that financial inclusiveness at MSMEs can improve their business performance (Bongomin et al, 2017;Fan & Zhang, 2017;Kalunda, 2014;Riwayati, 2017). Besides having an impact on business performance, macro-financial inclusiveness also has an impact on economic growth (Babajide et al, 2015;Demirguc-Kunt et al, 2017;Gretta, 2017;Sharma, 2016), financial system stability (Dienillah & Anggraeni, 2016), as well as the impact on poverty alleviation and income equality (Prastowo, 2018), although the relationship is still difficult to understand because of the limited research related to it (Demirguc-Kunt et al, 2017).…”

Financial inclusion dynamics in Southeast Asia: An empirical investigation on three countries

“…Still, a number of studies suggest that affordable and appropriate financial services between developed and developing countries vary widely (Beck & Demirgüç-Kunt, 2008), even within the same regions (e.g., Africa in Zins & Weill, 2016;Asia in Jahan et al, 2019;Le et al, 2019). In Asia, a general deepening in financial services is on-going: China (Fungáčová & Weill, 2015), India (Barik & Sharma, 2019), Vietnam (Do, Ngo, Luu, & Cao, 2020), and Indonesia (Riwayati, 2017;Tambunan, 2018). Nevertheless, Demirguc-Kunt et al (2018) highlight the significant gaps and little progress over time in the developing world, as ownership accounts remain lower for younger people, less-educated ones, lower-income individuals, and those out of the labor force.…”

The pillars determining financial inclusion among SMEs in Egypt: service awareness, access and usage metrics and macroeconomic policies

“…The paper’s methodology followed a twofold approach. First step, novel primary data were obtained from the online questionnaires to be consistent to other authors using primary data in determining factors influencing financial inclusion (see [ 12 , 19 , 50 ]). As previously mentioned, the questionnaire addressed private and public-sector bankers in managerial and non-managerial positions serving to SMEs.…”