Critical Factors that Determine Credit Approval to Micro, Small, and Medium Enterprises (MSME) IN BEKASI

Halim Putera Siswanto, Agus Zainul Arifin, Cavin Cavin

Abstract


Many business owners attempt to apply for bank credit, but not all of them are approved. This study aims to reveal the factors determining credit approval to Micro, Small, and Medium Enterprises (MSME). The variables used in this study are the owner's capital, company establishment, collateral value, credit amount, owner's age, and good relationship with the bank. In this study, the logit model used as a technique of analysis, in which there is only one dependent variable in the form of dummy along with the other six independent variables. The statistical test reveals that simultaneously all independent variables have significant effects on credit approval. Partially, only the owner's capital and good relationships with the bank do affect the approval. Therefore, business owners should pay more attention to their amount of capital and interrelation with the bank when applying for bank credit.

JEL Classification: C30, G21


Keywords


credit approval; logistic regression; micro, small, and medium enterprises (MSME)

Full Text:

PDF

References


Afandi, P. (2010). Analisis Implementasi 5C Bank BPR dalam Menentukan Kelayakan Pemberian Kredit pada Nasabah: Studi Kasus Pada BPR Bank Salatiga dan PT. BPR Kridaharta Salatiga (Analysis of 5C Implementation on Rural Banks in Determining the Feasibility of Providing Loans . Jurnal Ekonomi Dan Akuntansi, 3(5), 55–69.

Ajagbe, F. A. (2012). Application of Profit Analysis to Factors Affecting Small Scale Enterprises Decision to Take Credit: A Case Study of Oyo State, Nigeria. Asian Economic and Financial Review, 2(8), 1064–1071.

Behr, P., Foss, D., & Norden, L. (2017). Cyclicality of SME Lending and Government Involvement in Banks. Journal of Banking and Finance, 77, 64–77. https://doi.org/10.1016/j.jbankfin.2017.01.010

Boschi, M., Girardi, A., & Ventura, M. (2017). Partial Credit Guarantees and SMEs Financing. Journal of Financial Stability, 15, 182–194. https://doi.org/10.1016/j.jfs.2014.09.007

Cowan, K., Drexler, A., & Yañex, A. (2015). The Effect of Credit Guarantees on Credit Availability and Delinquency Rates. Journal of Banking and Finance, 59, 98–110. https://doi.org/10.1016/j.jbankfin.2015.04.024

De La Torre, A., Periá, M. S. M., & Schumkler, S. L. (2010). Bank Involvement with SMEs: Beyong Relationship Lending. Journal of Banking and Finance, 34(9), 2280–2293. https://doi.org/10.1016/j.jbankfin.2010.02.014

Degreyse, H., Matthews, K., & Zhao, T. (2018). SMEs and Access to Bank Credit: Evidence on the Regional Propagation of the Financial Crisis in the UK. Journal of Financial Stability, 38, 53–70. https://doi.org/10.1016/j.jfs.2018.08.006

Distinguin, I., Rugemintwati, C., & Tacneng, R. (2016). Can Informal Firms Hurt Registered SMEs’ Access to Credit? World Development, 84, 18–40. https://doi.org/10.1016/j.worlddev.2016.04.006

Fitria, N., & Sari, R. L. (2012). Analisis Kebijakan Pemberian Kredit dan Pengaruh Non-Performing Loan terhadap Loan-to-Deposit Ratio pada Bank Rakyat Indonesia (Persero) Tbk. Cabang Rantau, Aceh Tamiang: Periode 2007-2011 (Analysis of the Policy of Giving Credit and the Effect of Non-Per. Jurnal Ekonomi Dan Keuangan, 1(1), 88–101.

Fredriksson, A., & Moro, A. (2014). Bank-SMEs Relationship and Banks’ Risk-Adjusted Profitability. Journal of Banking and Finance, 41(67–77). https://doi.org/10.1016/j.jbankfin.2013.12.026

Freel, M., Carter, S., Tagg, S., & Mason, C. (2012). The Latent Demand for Bank Debt: Characterizing “Discouraged Borrowers.” Small Business Economics, 38(4), 399–418. https://doi.org/10.1007/s11187-010-9283-6

Gibb, A. A., & Ritchie, J. R. (1982). Understanding the Process of Starting Small Businesses. European Small Business Journal, 1, 26–45.

Hanis, U., & Nursyamsi, J. (2013). Pengaruh Prasyarat Kredit terhadap Kelancaran Pembayaran Nasabah: Studi Kasus Nasabah pada PT. Bank Bukopin Kantor Cabang Pembantu Cilegon (Effects of Credit Prerequisites on Smooth Customer Payments: Customer Case Study at PT. Bank Bukopin Sub-Branch Off. UG Jurnal, 7(5), 8–11.

Hirsch, B., Nitzl, C., & Schoen, M. (2018). Interorganizational Trust and Agency Costs in Credit Relationship Between Savings Bank and SMEs. Journal of Banking and Finance, 97, 37–50. https://doi.org/10.1016/j.jbankfin.2018.09.017

Jumhur. (2009). Analisis Permintaan Kredit Modal Kerja Usaha Kecil di Kota Pontianak (Analysis of Demand for Small Business Working Capital Loans in Pontianak City). Jurnal Bisnis Dan Ekonomi, 16(2), 85–96.

Kasmir. (2004). Bank & Lembaga Keuangan Lainnya (Bank and Other Financial Institutions). Jakarta: RajaGrafindo Persada.

Liang, L. W., Huang, B. Y., Liao, C. F., & Gao, Y. T. (2017). The Impact of SMEs’ Lending and Credit Guarantee on Bank Efficiency in South Korea. Review of Development Finance, 7(2), 134–141. https://doi.org/10.1016/j.rdf.2017.04.003

Lubis, A. M., & Rachmina, D. (2011). Faktor-Faktor yang Mempengaruhi Realisasi dan Pengembalian Kredit Usaha Rakyat (Factors Affecting the Realization and Return of People’s Business Loans). Agribusiness Forum, 1(2), 112–131.

Messah, O. B., & Wangai, P. N. (2011). Factors That Influence the Demand for Credit for Credit among Small-Scale Investors: A Case Study of Meru Central District, Kenya. Research Journal of Finance and Accounting, 2(2), 74–101.

Moro, A., & Fink, M. (2013). Loan Managers’ Trust and Credit Access for SMEs. Journal of Banking and Finance. Journal of Banking and Finance, 37(3), 927–936. https://doi.org/10.1016/j.jbankfin.2012.10.023

Pato, S. (2013). Analisis Pemberian Kredit Mikro pada Bank Syariah Mandiri Cabang Manado (Analysis of Provision of Micro Loans to Bank Syariah Mandiri, Manado Branch). Jurnal EMBA, 1(4), 875–885.

Rudiantoro, R., & Siregar, S. V. (2012). Kualitas Laporan Keuangan UMKM serta Prospek Implementasi SAK ETAP (Quality of MSME Financial Reports and Prospects for Implementation of SAK ETAP). Jurnal Akuntansi Dan Keuangan Indonesia, 9(1), 1–21.

Subandi, S. (2007). Potensi Pengembangan Permodalan UMKM dari Pinjaman Perbankan (Potential Development of MSME Capital from Banking Loans). Majalah Infokop, 15(2), 1–12.

Susilo, Y. S. (2010). Peran Perbankan dalam Pembiayaan UMKM di Propinsi DIY (The Role of Banking in Financing MSMEs in DIY Province). Jurnal Keuangan Dan Perbankan, 14(3), 467–478.




DOI: https://doi.org/10.15408/etk.v18i1.6722

Refbacks

  • There are currently no refbacks.




Hasil gambar untuk doaj

/public/site/images/rianto-arif/logogaruda-kecil_94 ISJD LIPI Academic Keyoa-library CrossRefMoraRefBASE-Search OAJI Open Archives Initiative

Hasil gambar untuk neliti.com

View My Stats

 

E-ISSN: 2461-0771 P-ISSN: 1412-8969 Free counters!

License

This work is licensed under CC BY-SA

© All rights reserved 2015.