Informal Business Financing Through People Business Credit Program: Evidence in Indonesia

Abstract

The Micro Small Medium Enterprises (MSMEs) in Indonesia is increasingly getting developed in the national economy. However, MSMEs have problem, the limited access to banking. The synergies are needed from financial institutions in order to support the increased access to credit for the development of MSMEs. The People Business Credit Program is one of the Government of Indonesia's programs in granting credit to a viable productive enterprise but has not fulfilled the banking requirements under the guarantee pattern. This credit program is done through linkage institutions channeling and executing model. Increasing the role of linkage institutions in credit for MSMEs needs to be viewed from various aspects. Therefore, it is necessary to study about informal business financing through People Business Credit Program through linkage institution, both channeling and executing model. The sample selections are based by judgment sampling. The scope of the areas that become the source of data are Bekasi and Tangerang Regency. Data obtained for the period 2016 to 2018.The result of the study shows that 1) there are not differences amongthe opinion of respondent in answering opinion about the role of linkage institution in improving credit to MSMEs and 2) there are differences amongthe strongly disagree, disagree, neutral, agree, and strongly agree in opinion about the role of linkage institution in improving credit to MSMEs.