Socio-economic factors influencing the decision to take credit for small entrepreneurs on the example of Yogyakarta city in Indonesia
Economic Annals-XXI: Volume 199, Issue (9-10), Pages: 19-26
Citation information:
Kana, A. A., Nurweni, H., Anggarini, Y., Jumintono, & Hartati, R. (2022). Socio-economic factors influencing the decision to take credit for small entrepreneurs on the example of Yogyakarta city in Indonesia. Economic Annals-XXI, 199(9-10), 19-26. doi: https://doi.org/10.21003/ea.V199-02
Any Agus Kana
MA (Management),
Management Higher Institute YKPN (Sekolah Tinggi Ilmu Manajemen)
Yogyakarta, Sleman, Daerah Istimewa Yogyakarta, 55581, Indonesia
anykanag@yahoo.com
ORCID ID: https://orcid.org/0000-0003-3956-8640
Hari Nurweni
MA (Management),
Management Higher Institute YKPN (Sekolah Tinggi Ilmu Manajemen)
Yogyakarta, Sleman, Daerah Istimewa Yogyakarta, 55581, Indonesia
nurwenhar@gmail.com
ORCID ID: https://orcid.org/0000-0002-5602-2917
Yunita Anggarini
MA (Management),
Management Higher Institute YKPN (Sekolah Tinggi Ilmu Manajemen)
Yogyakarta, Sleman, Daerah Istimewa Yogyakarta, 55581, Indonesia
yunita.an33@hotmail.com
ORCID ID: https://orcid.org/0000-0001-6527-6401
Jumintono
PhD (Economics),
Faculty of Technical and Vocational Education,
University Tun Hussein Onn Malaysia
Johor, 86400, Malaysia
masmintosragen@gmail.com
ORCID ID: https://orcid.org/0000-0002-7591-649X
Retno Hartati
MBA (Business Management),
Management Higher Institute YKPN (Sekolah Tinggi Ilmu Manajemen)
Yogyakarta, Sleman, Daerah Istimewa Yogyakarta, 55581, Indonesia
harterrt@yahoo.com
ORCID ID: https://orcid.org/0000-0003-3131-2544
Socio-economic factors influencing the decision to take credit for small entrepreneurs on the example of Yogyakarta city in Indonesia
Abstract. The study aims to figure out the socio-economic factors influencing the decision to take credit from banks by small entrepreneurs. This research is a quantitative study and uses binary logistic regression with the Cumulative Distribution Function (CDF) to determine the form of relationship between the decision to take credit with the influencing factor. Data was collected with questionnaire from 130 entrepreneurs-representatives of small licensed business from five industries in 2022. The samples were taken in stratified random sampling.
The results showed that the significant factors which affect the decision to take bank credit were gender, education level, markets served, industry, and collateral. It is concluded that the Bank and the Government of Yogyakarta could introduce the mechanisms which encourage entrepreneurs to be willing to access credit resources from the banks.
Keywords: Decision-Making; Credit; Small Entrepreneurs; Socio-Economic Factors; Demographics; Banks; MSME; SME
JEL Classification: A10; A12; D21; D70
Acknowledgements and Funding: The authors received no direct funding for this research. The authors thank to Sekolah Tinggi Ilmu Manajemen YKPN Yogyakarta for the support in this research.
Contribution: The authors contributed equally to this work.
Data Availability Statement: All data will be available upon request.
DOI: https://doi.org/10.21003/ea.V199-02
References
- Ahmad, N. M. N., Razzaq, A. R. A., & Maryati, M. (2019). Potential of community capacity building for ecotourism purposes in Tg.Piai, Johore. IOP Conference Series: Earth and Environmental Science, 269, 012007.
https://doi.org/10.1088/1755-1315/269/1/012007 - Allu, R., & Padmanabhuni, R. N. V. (2020). Prediction Models for Startups Success: A Empirical Analysis. International Journal of Innovative Technology and Exploring Engineering, 9(5), 1647-1650.
https://doi.org/10.35940/ijitee.e3053.039520 - Boadi, I., Dana, L. P., Mertens, G., & Mensah, L. (2017). SMEs’ Financing and Banks’ Profitability: A Good Date for Banks in Ghana? Journal of African Business, 18(2), 257-277.
https://doi.org/10.1080/15228916.2017.1285847 - Caselli, S., Corbetta, G., Rossolini, M., & Vecchi, V. (2019). Public Credit Guarantee Schemes and SMEs’ Profitability: Evidence from Italy. Journal of Small Business Management, 57(S2), 555-578.
https://doi.org/10.1111/jsbm.12509 - Cerasi, V., Fedele, A., & Miniaci, R. (2017). Product market competition and access to credit. Small Business Economics, 49(2), 295-318.
https://doi.org/10.1007/s11187-017-9838-x - Chaudhuri, K., Sasidharan, S., & Raj, R. S. N. (2020). Gender, small firm ownership, and credit access: some insights from India. Small Business Economics, 54, 1165-1181.
https://doi.org/10.1007/s11187-018-0124-3 - Chienwattanasook, K., Wattanapongphasuk, S., Prianto, A. L., & Jermsittiparsert, K. (2019). Corporate entrepreneurship and business performance of logistic companies in Indonesia. Industrial Engineering and Management Systems, 18(3), 541-550.
https://doi.org/10.7232/iems.2019.18.3.541 - Eggers, F. (2020). Masters of disasters? Challenges and opportunities for SMEs in times of crisis. Journal of Business Research, 116, 199-208.
https://doi.org/10.1016/j.jbusres.2020.05.025 - Kumar, S., & Rao, P. (2016). Financing patterns of SMEs in India during 2006 to 2013 – an empirical analysis. Journal of Small Business and Entrepreneurship, 28(2), 97-131.
https://doi.org/10.1080/08276331.2015.1132513 - de Sousa Jabbour, A. B. L., Ndubisi, N. O., & Seles, B. M. R. P. (2020). Sustainable development in Asian manufacturing SMEs: Progress and directions. International Journal of Production Economics, 225, 107567.
https://doi.org/10.1016/j.ijpe.2019.107567 - Moeuf, A., Pellerin, R., Lamouri, S., Tamayo-Giraldo, S., & Barbaray, R. (2018). The Industrial Management of SMEs in the Era of Industry 4.0. International Journal of Production Research, 56(3), 1118-1136.
https://doi.org/10.1080/00207543.2017.1372647 - Mukhametzhan, S. O., Junusbekova, G. A., & Daueshov, M. Y. (2020). An econometric model for assessing the asymmetry of urban development as a factor of regional economic growth: The case of Kazakhstan. Industrial Engineering and Management Systems, 19(2), 460-475.
https://doi.org/10.7232/iems.2020.19.2.460 - Nguyen, B., & Canh, N. Ph. (2021). Formal and informal financing decisions of small businesses. Small Business Economics, 57, 1545-1567.
https://doi.org/10.1007/s11187-020-00361-9 - Nguyen, H. Th., Nguyen, H. M., Troege, M., & Nguyen, A. T. H. (2020). Debt aversion, education, and credit self-rationing in SMEs. Small Business Economics, 57, 1125-1143.
https://doi.org/10.1007/s11187-020-00329-9 - Rahman, A., Belas, J., Kliestik, T., & Tyll, L. (2017). Collateral requirements for SME loans: empirical evidence from the Visegrad countries. Journal of Business Economics and Management, 18(4), 650-675.
https://doi.org/10.3846/16111699.2017.1357050 - Ribeiro-Soriano, D. (2017). Small business and entrepreneurship: their role in economic and social development. Entrepreneurship and Regional Development, 29(1-2), 1-3.
https://doi.org/10.1080/08985626.2016.1255438 - Spicka, J. (2020). Socio-demographic drivers of the risk-taking propensity of micro farmers: Evidence from the Czech Republic. Journal of Entrepreneurship in Emerging Economies, 12(4), 569-590.
https://doi.org/10.1108/JEEE-09-2019-0143 - Yacus, A. M., Esposito, S. E., & Yang, Y. (2019). The Influence of Funding Approaches, Growth Expectations, and Industry Gender Distribution on High-Growth Women Entrepreneurs. Journal of Small Business Management, 57(1), 59-80.
https://doi.org/10.1111/jsbm.12491
Received 12.05.2022
Received in revised form 23.06.2022
Accepted 29.06.2022
Available online 29.10.2022