IDEAS home Printed from https://ideas.repec.org/a/vrs/founma/v11y2019i1p131-142n11.html
   My bibliography  Save this article

The Role of Banking Capital in Industrial Sector Micro Enterprises for Poverty Alleviation: A Study in East Java, Indonesia

Author

Listed:
  • Purmiyati Atik

    (Airlangga University, Indonesia)

  • Berma Madeline

    (National University of Malaysia, Maleysia)

  • Talib Basri Abdul

    (National University of Malaysia, Maleysia)

  • Rakhima Marta Sabila

    (LPEP Airlangga University, Indonesia)

Abstract

This study examines the micro enterprises of industrial sectors that receive Kredit Usaha Rakyat (People’s Business Credit/KUR) or Commercial Credit (KK) in seven cities in East Java. Firstly, this study aims to measure the technical efficiency of micro enterprises in the industrial sector in East Java that accept KUR and KK using the Data Envelopment Analysis method; secondly, to examine the factors that influence the technical efficiency of micro enterprises, which receive KUR and KK with Tobit Regression. Unlike others’ researches, this paper attempts to determine the influence of technical efficiency and other factors on the poverty status of micro entrepreneurs using logistic regression. The average technical efficiencies of KUR and KK recipient micro businesses using the assumptions of the DEA VRS model are 0.94 and 0.77. While the average technical efficiencies of KUR and KK recipient micro businesses using the assumptions of the DEA CRS model are 0.88 and 0.71. The factors that influence the technical efficiency of micro enterprises recipients of KUR and KK are profit, experience, geographical location, amount of credit, KUR access, the credit realization period, and dummy variable of food and beverage products. The factors that influence the poverty status of micro-entrepreneurs are technical efficiency, income, KUR access, gender, number of household member, and geographical location. The results of this research can be a material consideration for the government in formulating policies.

Suggested Citation

  • Purmiyati Atik & Berma Madeline & Talib Basri Abdul & Rakhima Marta Sabila, 2019. "The Role of Banking Capital in Industrial Sector Micro Enterprises for Poverty Alleviation: A Study in East Java, Indonesia," Foundations of Management, Sciendo, vol. 11(1), pages 131-142, January.
    • Handle: RePEc:vrs:founma:v:11:y:2019:i:1:p:131-142:n:11
    DOI: 10.2478/fman-2019-0011
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/fman-2019-0011
    Download Restriction: no
    File URL: https://libkey.io/10.2478/fman-2019-0011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Abu, Orefi & Kirsten, Johann F., 2009. "The South African Maize Milling Industry: Can Small and Medium-scale Maize Milling Enterprise Survive and Thrive?," 2009 Conference, August 16-22, 2009, Beijing, China 51304, International Association of Agricultural Economists.
    2. repec:pru:wpaper:42 is not listed on IDEAS
    3. Connie Bayudan-Dacuycuy & Joseph Lim, 2014. "Chronic and Transient Poverty and Vulnerability to Poverty in the Philippines: Evidence Using a Simple Spells Approach," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 118(1), pages 389-413, August.
    4. Gebremariam, Gebremeskel H. & Gebremedhin, Tesfa G. & Jackson, Randall W., 2004. "The Role Of Small Business In Economic Growth And Poverty Alleviation In West Virginia: An Empirical Analysis," 2004 Annual meeting, August 1-4, Denver, CO 20290, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Pervez Zammurad Janjua & Usman Ahmad Kamal, 2011. "The Role of Education and Income in Poverty Alleviation: A Cross-Country Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 16(1), pages 143-172, Jan-Jun.
    6. repec:rri:wpaper:200410 is not listed on IDEAS
    7. Indunil De Silva, 2008. "Micro‐level determinants of poverty reduction in Sri Lanka: a multivariate approach," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 35(3), pages 140-158, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yen H. T. Nguyen & Tuyen Q. Tran & Dung T. Hoang & Thu M. T. Tran & Trung T. Nguyen, 2023. "Land quality, income, and poverty among rural households in the North Central Region, Vietnam," Poverty & Public Policy, John Wiley & Sons, vol. 15(2), pages 150-172, June.
    2. Dr. J. G. Sri Ranjith & Dr. O. G Dayaratna Banda, 2014. "Determinants of Success of Small Business: A Survey-Based Study in Kuliyapitiya Divisional Secretariat of Sri Lanka," International Journal of Business and Social Research, LAR Center Press, vol. 4(6), pages 38-50, June.
    3. Abderrahman Yassine & Fatima Bakass, 2022. "Do Education and Employment Play a Role in Youth’s Poverty Alleviation? Evidence from Morocco," Sustainability, MDPI, vol. 14(18), pages 1-25, September.
    4. Ahmed Raza ul MUSTAFA* & Mohammad NISHAT**, 2017. "ROLE OF SOCIAL PROTECTION IN POVERTY REDUCTION IN PAKISTAN: A Quantitative Approach," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 27(1), pages 67-88.
    5. Saqlain Latif Satti & Muhammad Shahid Hassan & Fozia Hayat & Sudharshan Reddy Paramati, 2016. "Economic Growth and Inflow of Remittances: Do They Combat Poverty in an Emerging Economy?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(3), pages 1119-1134, July.
    6. Muhammad Shahid Hassan & Samra Bukhari & Noman Arshed, 2020. "Competitiveness, governance and globalization: What matters for poverty alleviation?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(4), pages 3491-3518, April.
    7. Chenhong Peng & Lue Fang & Julia Shu-Huah Wang & Yik Wa Law & Yi Zhang & Paul S. F. Yip, 2019. "Determinants of Poverty and Their Variation Across the Poverty Spectrum: Evidence from Hong Kong, a High-Income Society with a High Poverty Level," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 144(1), pages 219-250, July.
    8. Jeyapraba Suresh, 2023. "Poverty is Lack of Capabilities: A Literature Review," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(3), pages 462-476, March.
    9. Ahmed Raza Cheema & Ahmed Raza Cheema, 2012. "Poverty, Income Inequality, and Growth in Pakistan: A Pooled Regression Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(2), pages 137-157, July-Dec.
    10. Ranathunga, Seetha P.B., 2010. "The determinants of household poverty in Sri Lanka: 2006/2007," MPRA Paper 34174, University Library of Munich, Germany, revised 20 Oct 2010.
    11. Shrimoyee Ganguly & Rajat Acharyya, 2024. "Money, exchange rate and export quality," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 33(1), pages 118-144, January.
    12. Connie Bayudan-Dacuycuy & Lora Kryz Baje, 2019. "When It Rains, It Pours? Analyzing the Rainfall Shocks-Poverty Nexus in the Philippines," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 145(1), pages 67-93, August.
    13. Jhon Edwar Hernández & Blanca Zuluaga, 2022. "Vulnerability to Multidimensional Poverty: An Application to Colombian Households," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(1), pages 345-371, November.
    14. Ja-Young Han & Jae-Hee Kwon & Sun-Hwa Kim & Heeyoung Lee, 2023. "Hepatitis Risk in Diabetes Compared to Non-Diabetes and Relevant Factors: A Cross-Sectional Study with National Health and Nutrition Examination Survey (NHANES), 2013–2018," IJERPH, MDPI, vol. 20(6), pages 1-12, March.
    15. Dacuycuy, Connie B. & Baje, Lora Kryz, 2017. "Chronic Food Poverty in the Philippines," Discussion Papers DP 2017-25, Philippine Institute for Development Studies.
    16. Rizwan Akhtar & Hongman Liu & Amjad Ali, 2017. "Influencing Factors of Poverty in Pakistan: Time Series Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 215-222.
    17. Liu, Xiaoying & Hannum, Emily, 2017. "Early poverty exposure predicts young adult educational outcomes in China," China Economic Review, Elsevier, vol. 44(C), pages 79-97.
    18. Wu, Alfred M. & Ramesh, M., 2014. "Poverty Reduction in Urban China: The Impact of Cash Transfers," MPRA Paper 54358, University Library of Munich, Germany.
    19. Muhammad Luqman & Muhammad Umer Mehmood & Muhammad Farooq & Tariq Mehmood & Muhammad Waqar & Muhammad Yaseen & Mukkram Ali Tahir, 2021. "Critical Analysis of Rural Development Initiatives in Pakistan," Journal of Economic Impact, Science Impact Publishers, vol. 3(2), pages 121-129.
    20. Bodrun Nahar & Mahinda Siriwardana, 2013. "Trade Opening, Fiscal Reforms, Poverty, and Inequality: A CGE Analysis for Bangladesh," The Developing Economies, Institute of Developing Economies, vol. 51(2), pages 145-185, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:founma:v:11:y:2019:i:1:p:131-142:n:11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.