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

Abstract

Purpose The purpose of this paper is to address the small, women micro-entrepreneur dominated and heterogeneity limitations of the Atmadja et 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 microcredit per 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.

Microfinance and Sustainable Development in Africa

“…This suggests that the gender of the entrepreneurs investigated impede the microbusiness ability to employ more people and the growth of the business. Therefore, the negative relationships found between gender and microenterprise employment creation and development in Indonesia by Atmadja, et al, (2018) are consistent with the findings of this chapter. Besides, Dutta and Banerjee (2018) have also shown that the gender role of women entrepreneurs in Bangladesh forces them to be less risky which often encourage them to invest in low growth businesses which impact negatively on their ability to employ more staff.…”

“…Similarly, a previous study conducted in Pakistan by Naeem (2016) found that microbusinesses operated by male entrepreneurs created more jobs than female operated businesses. However, the outcomes of Atmadja, et al, (2018) suggests that entrepreneur gender has a negative impact on microenterprise employment creation in Indonesia. Besides, Dutta and Banerjee (2018) have also shown that the gender role of women entrepreneurs in Bangladesh forces them to be less risky which often encourage them to invest in low growth businesses which impact negatively on their ability to employ more staff.…”

Studi Literatur Skema Pembiayaan Lembaga Keuangan Mikro Syariah

“…Lembaga keuangan mikro syariah adalah jalan keluar untuk pengentasan kemiskinan (Atmadja et al, 2018). Dimana salah satu program utamanya adalah intervensi kebijakan untuk pembangunan sosial "bottom-up" dan ekonomi lokal serta pengurangan kemiskinan telah diidentifikasi selama 40 tahun ini.…”

Conceptualizing recourses as antecedents to the economic performance of family-based microenterprise – the moderating role of competencies

“…Atmadja (2016) and Mustapa et al (2018) found a similar result from their study that loan size has a negative or non-significant relationship with performance. Further, based on an extensive and update survey in Indonesia, Atmadja et al (2018) claimed that microfinance might not matter for microenterprise performance. Therefore, "all you need is financing" is an axiom and generalized idea to succeed in a business project.…”