Microfinance and microenterprise performance in Indonesia: an extended and updated survey

Adwin Surja Atmadja, Parmendra Sharma and Jen-Je Su

International Journal of Social Economics, 2018, vol. 45, issue 6, 957-972

Abstract: Purpose - The purpose of this paper is to address the small, women micro-entrepreneur dominated and heterogeneity limitations of the Atmadjaet al.(2016) study. The sample is much larger, includes more men and is more heterogeneous, which allows deeper insights and more meaningful explanation of the relationship between microfinance and microenterprise performance in the case of Indonesia, including the effects of gender, lending scheme and money separation. Design/methodology/approach - This study used a survey of 556 respondents across five microcredit providers in the city of Surabaya using an updated instrument. Ordered probit is used to analyse data. Findings - Microfinance may not matter for microenterprise performance in the case of Indonesia. Additionally, microcredit schemes (individual vs group) and gender may also not matter for performance, but money separation might have some influence. Practical implications - Non-financial factors such as human capital, spousal involvement, and money separation should be considered as important factors for improving microenterprise business performance in Indonesia, with less focus on microcreditper se. Originality/value - This study provides further evidence that microfinance may not matter for microenterprise performance in the case of Indonesia, a populous middle income country with a very long history of microfinance.

Keywords: Microfinance; Microenterprise performance; Money separation (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijsepp:ijse-02-2017-0031

DOI: 10.1108/IJSE-02-2017-0031

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