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

Author

Listed:
  • Adwin Surja Atmadja
  • Parmendra Sharma
  • Jen-Je Su

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.

Suggested Citation

  • Adwin Surja Atmadja & Parmendra Sharma & Jen-Je Su, 2018. "Microfinance and microenterprise performance in Indonesia: an extended and updated survey," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 45(6), pages 957-972, June.
    • Handle: RePEc:eme:ijsepp:ijse-02-2017-0031
    DOI: 10.1108/IJSE-02-2017-0031
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    Citations

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    Cited by:

    1. Sanjeev S. Ingalagi & Nishad Nawaz & Habeeb Ur Rahiman & A. Hariharasudan & Vanishree Hundekar, 2021. "Unveiling the Crucial Factors of Women Entrepreneurship in the 21st Century," Social Sciences, MDPI, vol. 10(5), pages 1-12, April.
    2. Gonzales Martinez, Rolando & D’Espallier, Bert & Mersland, Roy, 2021. "Bifurcations in business profitability: An agent-based simulation of homophily in self-financing groups," Journal of Business Research, Elsevier, vol. 129(C), pages 495-514.

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