THE INFLUENCE OF MICRO FINANCIAL OF MICRO FINANCIAL INSTITUTION TO DEVELOP COOPERATIVES AND MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) IN KEDIRI CITY

Muchson, Muchamad and Monica, Suci (2019) THE INFLUENCE OF MICRO FINANCIAL OF MICRO FINANCIAL INSTITUTION TO DEVELOP COOPERATIVES AND MICRO, SMALL AND MEDIUM ENTERPRISES (MSMEs) IN KEDIRI CITY. Prosiding Seminar Nasional Manajemen, Ekonomi, dan Akuntansi. pp. 84-94. ISSN 978-602-51598-6-2

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Abstract

There are various kinds of problems experienced by cooperatives and Micro, small and medium Enterprises (MSMEs). Those are the capital barriers, obtaining raw materials, marketing, production techniques, management, competition, and others. The obstacle which has the highest percentage was the capital problem. MSMEs usually use capital from their own capital. It was because of the difficulty for finding formal capital source such as bank especially whent they start the economic activities. One of the finance institutions that can be accessed by MSMEs is Micro Financial Institution (MFI). The definition about micro finance as abbreviation of micro enterprise finance is financial services for micro enterprises. Microfinance basically serves financial support for micro enterprises to increase the business. One of the special things of microfinance is the procedure that is not complicated and shows that financial services have a big impact on micro enterprises. The purpose of this research is to analyze the impact of microfinance institution to develop cooperatives and MSMEs in Kediri. This research uses survey method. The population is all cooperatives and MSMEs which received loan from Jatim Bank and Public Credit Bank in Kediri. The study samples in this research were some of cooperatives and MSMEs receiving the loan from Jatim Bank and Public Credit Bank in Kediri City as much as 15 MSMEs. The collecting of the sample is done randomly. The research uses instruments as interview, documentation and questioners. The research results show: 1) the main problem of cooperatives and MSMEs is lacks of capital, and the capital source is from themselves, so it is required bracing of capital of MFIs. 2) MFIs can be distinguished into bank and non-bank. Microfinance non-bank consists of formal and non-formal. MSMEs can optimize the utilization of capital from microfinance non-bank. And 3) there are positive and significant influence of microfinance institution to the development of MSMEs. The positive influence means microfinance can develop MSMEs and significant influence means that the influence is real so that it is required the greater contribution of MFIs for the development of MSMEs. 4)Because of the big benefit of microfinance institution for MSMEs, so it is required strengthening, empowerment, and development of MFIs.

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