THE INFLUENCE OF FINANCIAL INSTITUTIONS ON THE GROWTH OF THE MICRO AND SMALL AGRIBUSINESS INDUSTRY IN INDONESIA

Syalma Nabila Kamal; Dwi Rachmina; Feryanto Feryanto

doi:10.14710/agrisocionomics.v7i3.19784

DOI: https://doi.org/10.14710/agrisocionomics.v7i3.19784

THE INFLUENCE OF FINANCIAL INSTITUTIONS ON THE GROWTH OF THE MICRO AND SMALL AGRIBUSINESS INDUSTRY IN INDONESIA

*Syalma Nabila Kamal - Agribusiness, Faculty of Economic and Management, IPB University, Bogor, West Java, Indonesia, Indonesia

Dwi Rachmina - Agribusiness, Faculty of Economic and Management, IPB University, Bogor, West Java, Indonesia, Indonesia

Feryanto Feryanto - Agribusiness, Faculty of Economic and Management, IPB University, Bogor, West Java, Indonesia, Indonesia

BibTex Citation Data :

@article{Agrisocionomics19784,
    author = {Syalma Kamal and Dwi Rachmina and Feryanto Feryanto},
    title = {THE INFLUENCE OF FINANCIAL INSTITUTIONS ON THE GROWTH OF THE MICRO AND SMALL AGRIBUSINESS INDUSTRY IN INDONESIA},
    journal = {Agrisocionomics: Jurnal Sosial Ekonomi Pertanian},
  volume = {7},
    number = {3},
    year = {2023},
    keywords = {agribusiness MSIs, financial institution, growth industry},
    abstract = { Agribusiness micro and small industries (MSI) have contributions in economic and social aspects. Financial institutions provide facilities and products to increase the accessibility of capital for Agribusiness MSIs. This study aims to analyze the influence of banks and non-bank financial institutions on the growth of micro and small food and non-food agribusiness industries. This study uses secondary data from potential village surveys in 2018 and 2022 with 82,900 villages in Indonesia annually. Data were analyzed using the Fixed Effect Model in Stata 15.0 software. The results show that four variables significantly positively affect Agribusiness MSIs: non-bank financial institutions (savings and loan cooperatives), electricity index, infrastructure and distribution index, and telecommunications and information index. The disaggregation results based on Agribusiness MSIs sector (food and non-food) show that the food and non-food agribusiness MSIs is positively and significantly influenced by non-bank financial institutions (saving and loan cooperative), the electricity index, as well as the telecommunication and information index. However, bank financial institutions, as well as infrastructure and distribution indexes, only have a significant positive effect on non-food Agribusiness MSIs. Alternative to increasing the number of Agribusiness MSIs units can be done with government support through policies to optimize the role of cooperatives and distribute infrastructure, especially related to telecommunications and information. },
   issn = {2621-9778},   pages = {711--722}  doi = {10.14710/agrisocionomics.v7i3.19784},
    url = {https://ejournal2.undip.ac.id/index.php/agrisocionomics/article/view/19784}
}

Citation Format:

Abstract

Agribusiness micro and small industries (MSI) have contributions in economic and social aspects. Financial institutions provide facilities and products to increase the accessibility of capital for Agribusiness MSIs. This study aims to analyze the influence of banks and non-bank financial institutions on the growth of micro and small food and non-food agribusiness industries. This study uses secondary data from potential village surveys in 2018 and 2022 with 82,900 villages in Indonesia annually. Data were analyzed using the Fixed Effect Model in Stata 15.0 software. The results show that four variables significantly positively affect Agribusiness MSIs: non-bank financial institutions (savings and loan cooperatives), electricity index, infrastructure and distribution index, and telecommunications and information index. The disaggregation results based on Agribusiness MSIs sector (food and non-food) show that the food and non-food agribusiness MSIs is positively and significantly influenced by non-bank financial institutions (saving and loan cooperative), the electricity index, as well as the telecommunication and information index. However, bank financial institutions, as well as infrastructure and distribution indexes, only have a significant positive effect on non-food Agribusiness MSIs. Alternative to increasing the number of Agribusiness MSIs units can be done with government support through policies to optimize the role of cooperatives and distribute infrastructure, especially related to telecommunications and information.

Fulltext View|Download

Keywords: agribusiness MSIs, financial institution, growth industry

Article Metrics:

Article Info

Section: Articles

Language : EN

In Vol 7, No 3 (2023): November 2023

Recent articles

LIBERICA COFFEE SUPPLY CHAIN PERFORMANCE IN KAYONG UTARA DISTRICT DEVELOPMENT STRATEGY FOR PALM SUGAR (CASE STUDY OF THE BUHUNG LALI FOREST FARMER GROUP, IN BUKIT HARAPAN VILLAGE, GANTARANG DISTRICT, BULUKUMBA REGENCY, SOUTH SULAWESI) STRATEGY AND PARTICIPATION OF COFFEE AGRO-TOURISM DEVELOPMENT IN WAGIR DISTRICT, MALANG REGENCY More recent articles

Bongomin, G. O. C., Ntayi, J. M., Munene, C., and Akol, C. M. 2017. The relationship between access to finance and growth of SMEs in developing economies: Financial literacy as a moderator. Review of International Business and Strategy, 27(4): 520–538. https://doi.org/10.1108/RIBS-04-2017-0037
Caroline, Sugiarto, D., Nuraeni, E., Warsiati, W., Fitriana, A. I., Saputra, H. E., Defitri, S. Y., Hikmah, Arumingtyas, F., Wiliana, E., Trisavinaningdia, A., Febrianto, H. G., Djuaniardi, D., Abdurohim, and Firmansyah, H. 2021. Bank dan lembaga keuangan lainnya. Insania
Darwin. 2018. MSMES in inclusive financing perspective in Indonesia. Jurnal Ekonomi Pembangunan, 26(1): 59–76. https://jurnalekonomi.lipi.go.id/JEP/article/view/228
Dobson, A. J., and Barnett, A. G. 2018. An introduction to generalized linear models (4th ed.). CRC Press
Edelia, A., and Aslami, N. 2022. The Role of empowerment of the cooperative and msme office in the development of small and medium micro enterprises in Medan City. Marginal : Journal of Management, Accounting, General Finance and International Economic Issues, 1(3): 31–36. https://doi.org/10.55047/marginal.v1i3.163
Fadliansyah, Marwiyati, and Adi, R. 2022. Peran koperasi simpan pinjam dalam upaya pengembangan usaha mikro kecil dan menengah (UMKM) di Kabupaten Aceh Barat (Studi kasus pada Koperasi Simpan Pinjam (KSP) Mandiri Jaya Meulaboh). Jurnal Ilmiah Basis Ekonomi Dan Bisnis, 1(1): 72–90. https://doi.org/10.22373/jibes.v1i1.1562
Forkuoh, S. K., and Li, Y. 2015. Electricity power insecurity and smes growth: A case study of the cold store operators in the Asafo Market Area of the Kumasi Metro in Ghana. Open Journal of Business and Management, 3(3): 312–325. https://doi.org/10.4236/ojbm.2015.33031
Gaglio, C., Kraemer-Mbula, E., and Lorenz, E. 2022. The effects of digital transformation on innovation and productivity: Firm-level evidence of South African manufacturing micro and small enterprises. Technological Forecasting and Social Change, 182(2021): 121785. https://doi.org/10.1016/j.techfore.2022.121785
Gibbons, S., Lyytikäinen, T., Overman, H. G., and Sanchis-Guarner, R. 2019. New road infrastructure: The effects on firms. Journal of Urban Economics, 110(2018): 35–50. https://doi.org/10.1016/j.jue.2019.01.002
Heryasa, T., and Purmiyati, A. 2022. Analysis of The Effect of Information and Communication Technology on the Production of Micro and Small Enterprises in Indonesia. Media Trend, 17(2): 329–342
Hilmawati, M. R. N., and Kusumaningtias, R. 2021. Inklusi keuangan dan literasi keuangan terhadap kinerja dan keberlangsungan sektor usaha mikro kecil menengah. Nominal: Barometer Riset Akuntansi Dan Manajemen, 10(1): 135–152. https://doi.org/10.21831/nominal.v10i1.33881
Hsiao, C. 2022. Analysis of panel data (4th ed.). Cambridge University Press
Jinjarak, Y., and Wignaraja, G. 2016. An empirical assessment of the export—financial constraint relationship: How different are small and medium enterprises?. World Development, 79: 152–163. https://doi.org/10.1016/j.worlddev.2015.11.012
Krisnamurthi, B. 2018. Refleksi Agribisnis: 65 Tahun Profesor Bungaran Saragih. Bogor: IPB Press
Latuconsina, Z. M. Y. 2017. Analisis faktor-faktor yang mempengaruhi indeks pembangunan manusia Kabupaten Malang berbasis pendekatan perwilayahan dan regresi panel. Journal of Regional and Rural Development Planning, 1(2): 202. https://doi.org/10.29244/jp2wd.2017.1.2.202-216
Ministry of Cooperatices and SMEs of the Republic of Indonesia. 2021. KUKM dalam angka. https://kemenkopukm.go.id/kumkm-dalam-angka/?type=indikator-ekonomi⊂=1
Mukhtar, S., Putri, K. Y. S., Suseno, D. A., Wibowo, A., and Wardana, L. W. 2020. Influence of information technology towards the development economics of SMEs in Indonesia. Humanities and Social Sciences Letters, 8(3): 268–279. https://doi.org/10.18488/journal.73.2020.83.280.291
Osoro, K., and Muturi, W. 2013. The role of micro financial institutions on the growth of smes in kenya:a case study of micro financial institutions in Kisi Town. IOSR Journal Of Humanities and Social Science, 16(1): 83–93. https://doi.org/10.9790/0837-1618393
Palei, T. 2015. Assessing the impact of infrastructure on economic growth and global competitiveness. Procedia Economics and Finance, 23(2014): 168–175. https://doi.org/10.1016/s2212-5671(15)00322-6
Rachmina, D., Daryanto, A., Tambunan, M., and Hakim, D. B. 2014. Impact of infrastructure on profit efficiency of vegetable farming in West Java, Indonesia: Stochastic frontier approach. Journal of ISSAAS, 20(1): 77–92
Tambunan, T. T. H. 2021. UMKM di Indonesia: Perkembangan, kendala, dan tantangan. Prenada

Last update:

No citation recorded.

Last update:

No citation recorded.

Starting from 2021, the author(s) whose article is published in the Agrisocionomics journal attain the copyright for their article. By submitting the manuscript to Agrisocionomics, the author(s) agree with this policy. No special document approval is required.

The author(s) guarantee that:

Their article is original, written by the mentioned author(s),
Has never been published before,
Does not contain statements that violate the law, and
Does not violate the rights of others, is subject to copyright held exclusively by the author(s), and is free from the rights of third parties, and that the necessary written permission to quote from other sources has been obtained by the author(s).

The author(s) retain all rights to the published work, such as (but not limited to) the following rights:

Copyright and other proprietary rights related to the article, such as patents,
The right to use the substance of the article in its own future works, including lectures and books,
The right to reproduce the article for its own purposes,
The right to archive all versions of the article, and
The right to enter into separate additional contractual arrangements for the non-exclusive distribution of published versions of the article (for example, posting them to institutional repositories or publishing them in a book), acknowledging its initial publication in this journal.

If the article was prepared jointly by more than one author, each author submitting the manuscript warrants that they have been given permission by all co-authors to agree to copyright and license notices (agreements) on their behalf, and agree to notify the co-authors of the terms of this policy. Agrisocionomics will not be held responsible for anything that may arise because of the writer's internal dispute. Agrisocionomics will only communicate with correspondence authors.

Authors should also understand that once published, their articles (and any additional files, including data sets, and analysis/computation data) will become publicly available. The license of published articles (and additional data) will be governed by the Creative Commons Attribution license as currently featured on the Creative Commons Attribution-ShareAlike 4.0 International License. Agrisocionomics allows users to copy, distribute, display and perform work under license. Users need to attribute the author(s) and Agrisocionomics to distribute works in journals and other publication media. Unless otherwise stated, the author(s) is a public entity as soon as the article is published.