Determining Factors Affecting MSME Financing: Efforts to Increase the Macroprudential Inclusive Financing Ratio
Abstract
MSME players are critical engines for the economy in Indonesia. Therefore, this study aims to determine the factors that influence the distribution of MSME financing in Indonesia. This quantitative research uses secondary data from Islamic banking statistics and Bank Indonesia from 2021 to 2022. The data analysis method used is a multiple linear regression analysis methods using the Eviews 12 program, then explained descriptively. The results indicated that SBIS did not significantly impact the distribution of MSME financing in Indonesia. Similarly, inflation does not have a significant impact on MSME financing. However, NPF can significantly impact the distribution of MSME financing in Indonesia. In contrast to DPK, it is not able to have a significant impact on the distribution of MSME financing in Indonesia. This study implies that collaboration from various stakeholders is needed to increase the Macroprudential Inclusive Financing Ratio (RPIM). With the improvement of PBI, RPIM requires the fulfillment of RPIM by banks and the determination of RPIM targets based on self-assessment results outlined in the bank's business plan. However, it is necessary to pay attention to economic conditions that are still unstable due to the Covid-19 pandemic.
References
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Hafizh, M., Hidayah, N., & Silalahi, P. R. (2020). Macroeconomics and profit sharing financing in Islamic banking in Indonesia: The third parties fund as intervening. Jurnal Akuntansi Dan Keuangan Islam, 8(2, Oktober), 131–147. https://doi.org/10.35836/jakis.v8i2.183
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Isaga, N. (2018). Access to bank credit by smallholder farmers in Tanzania: A case study. Afrika Focus, 31(1), 241–256.
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Kawiryawan, N., & Hapsari, M. I. (2015). Pengaruh Tingkat Return Sertifikat Bank Indonesia Syariah (SBIS) Terhadap Penempatan Pada SBIS dan ROA Bank Umum Syariah di Indonesia. Jurnal Ekonomi Syariah Teori Dan Terapan, 2(11).
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Khan, M. S., Senhadji, A. S., & Smith, B. D. (2006). Inflation and financial depth. Macroeconomic Dynamics, 10(2), 165–182. https://doi.org/10.1017/S1365100506050152
Kominfo. (2023). Data UMKM. KEMENKOPUKM. https://kemenkopukm.go.id/data-umkm
Lamont, O. A. (2002). Macroeconomic forecasts and microeconomic forecasters. Journal of Economic Behavior & Organization, 48(3), 265–280. https://doi.org/10.1016/S0167-2681(01)00219-0
Muhfiatun, M., Syarifah, L., & Salam, A. N. (2021). EFEKTIFITAS INSTRUMEN MONETER SYARIAH TERHADAP PENYALURAN DANA KE SEKTOR USAHA MIKRO KECIL MENENGAH (UMKM) DI INDONESIA. Al-Mashrof: Islamic Banking and Finance, 2(1), 1–15. https://doi.org/10.24042/al-mashrof.v2i1.8743
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Muwazir, M. R., & Anwar, D. (2018). The Role of Sharia Monetary Instrument in Liquidity Management and Performance Improvement of Islamic Banking Financial in Indonesia. Al-’Adalah, 15(2), 389–414. https://doi.org/10.24042/adalah.v15i2.3200
Nasution, S. J., & Sudiarti, S. (2023). Analisis Pengaruh Sertifikat Bank Indonesia Syariah (SBIS), Nilai Tukar (Kurs) Dan Inflasi Terhadap Pembiayaan Bermasalah Perbankan Syariah Di Indonesia Periode 2018-2021. Jurnal Ilmiah Ekonomi Islam, 9(1), 726–731.
Nursini, N. (2020). Micro, small, and medium enterprises (MSMEs) and poverty reduction: Empirical evidence from Indonesia. Development Studies Research, 7(1), 153–166. https://doi.org/10.1080/21665095.2020.1823238
Pradesyah, R., & Triandhini, Y. (2021). The Effect Of Third Party Funds (Dpk), Non Performing Financing (NPF), And Indonesian Sharia Bank Certificates (SBIS) On Sharia Banking Financing Distribution In Indonesia. International Journal of Business, Economics, and Social Development, 2(2), 72–77.
Priyadi, U., Utami, K. D. S., Muhammad, R., & Nugraheni, P. (2021). Determinants of credit risk of Indonesian Sharīʿah rural banks. ISRA International Journal of Islamic Finance, 13(3), 284–301.
Ramadhan, M. M., & Beik, I. S. (2013). Analisis pengaruh instrumen moneter syariah dan konvensional terhadap penyaluran dana ke sektor usaha mikro kecil dan menengah (umkm) di indonesia. AL-Muzara’ah, 1(2), 175–190. https://doi.org/10.29244/jam.1.2.175-190
Riadi, S. (2018). The effect of Third Parties Fund, Non Performing Loan, Capital Adequacy Ratio, Loan to Deposit Ratio, Return On Assets, Net Interest Margin and Operating Expenses Operating Income on Lending (Study in Regional Development Banks in Indonesia). 1015–1026.
Serrano, A. S. (2021). The impact of non-performing loans on bank lending in Europe: An empirical analysis. The North American Journal of Economics and Finance, 55, 101312.
Sidrauski, M. (1967). Inflation and economic growth. Journal of Political Economy, 75(6), 796–810.
Soemitra, A., Ismal, R., Fuadi, F., Al-Amin, H., Harianto, S., Nur, M. M., & Hakim, A. F. (2021). Analysis Of Islamic Monetary Policy Transmission On Business Sector And MSME Performance. E-Mabis: Jurnal Ekonomi Manajemen Dan Bisnis, 22(2), 66–76.
Sri, A., Anggraini, R., Gurendrawati, E., & Hasanah, M. (2013). The Influence of Third-Party Funds, Car, Npf and Roa Against the Financing of A General Sharia-Based Bank in Indonesia. 20, 23.
Supriyatni, R., & Nurjamil, N. (2021). The Urgency of Handling Non-Performing Financing in Sharia Banks in the Development of Indonesian Sharia Economics. PADJADJARAN Jurnal Ilmu Hukum (Journal of Law), 8(1), 26–46. https://doi.org/10.22304/pjih.v8n1.a2
Thornton, J., & Di Tommaso, C. (2021). The effect of non‐performing loans on credit expansion: Do capital and profitability matter? Evidence from European banks. International Journal of Finance & Economics, 26(3), 4822–4839. https://doi.org/10.1002/ijfe.2042
Umar, M., Maijama’a, D., & Adamu, M. (2014). Conceptual exposition of the effect of inflation on bank performance. Journal of World Economic Research, 3(5), 55–59.
Vithessonthi, C. (2016). Deflation, bank credit growth, and non-performing loans: Evidence from Japan. International Review of Financial Analysis, 45, 295–305.
Wahyudi, I., & Sani, G. A. (2014). Interdependence between Islamic capital market and money market: Evidence from Indonesia. Borsa Istanbul Review, 14(1), 32–47. https://doi.org/10.1016/j.bir.2013.11.001
Warjiyo, P., & Agung, J. (2002). Transmission Mechanisms of Monetary Policy in Indonesia. Directorate of Economic Research and Monetary Policy, Bank Indonesia.
Widiyono, T. (2022). Juridical Review of Credit Collateral within Financial Engineering in Indonesia: An Introduction. JL Pol’y & Globalization, 121, 1.
Agussalim, M., Limakrisna, N., & Ali, H. (2017). Mutual funds performance: Conventional and Sharia product. International Journal of Economics and Financial Issues, 7(4), 150–156.
Amah, N. (2013). Bank syariah dan UMKM dalam menggerakkan roda perekonomian Indonesia: Suatu kajian literatur. Assets: Jurnal Akuntansi Dan Pendidikan, 2(1), 48–54. https://doi.org/10.25273/jap.v2i1.561
Annisa, A. I. N., Setyowati, D. H., & Ruhadi, R. (2021). Pengaruh DPK, NPF, dan Inflasi terhadap Penyaluran Pembiayaan UMKM di Bank Syariah. Journal of Applied Islamic Economics and Finance, 1(3), 596–607. https://doi.org/10.35313/jaief.v1i3.2600
Azizah, S. N., & Astuti, T. (2019). The Effect of the Effectiveness of Third Party Funds, BOPO, Financing and Capital Adequacy Ratio on Profit Distribution Management. 324–329. https://doi.org/10.2991/icoi-19.2019.55
Azizuddin, I. (2022). PENGARUH FAKTOR INTERNAL DAN EKSTERNAL TERHADAP PEMBIAYAAN SEKTOR UMKM PADA BANK UMUM SYARIAH DI INDONESIA. Stability: Journal of Management and Business, 5(1), 1–16. https://doi.org/10.26877/sta.v5i1.11730
Bank Indonesia. (2021). Laporan Ekonomi & Keuangan Syariah 2021. Bank Indonesia.
Bank Indonesia. (2022). Kajian Ekonomi & Keuangan Syariah 2022. Bank Indonesia.
Boyd, J. H., Levine, R., & Smith, B. D. (2001). The impact of inflation on financial sector performance. Journal of Monetary Economics, 47(2), 221–248. https://doi.org/10.1016/S0304-3932(01)00049-6
Cucinelli, D. (2015). The impact of non-performing loans on bank lending behavior: Evidence from the Italian banking sector. Eurasian Journal of Business and Economics, 8(16), 59–71.
Hafizh, M., Hidayah, N., & Silalahi, P. R. (2020). Macroeconomics and profit sharing financing in Islamic banking in Indonesia: The third parties fund as intervening. Jurnal Akuntansi Dan Keuangan Islam, 8(2, Oktober), 131–147. https://doi.org/10.35836/jakis.v8i2.183
Hamilton, J. D. (2009). Causes and Consequences of the Oil Shock of 2007-08. National Bureau of Economic Research.
Hanggraeni, D., Ślusarczyk, B., Sulung, L. A. K., & Subroto, A. (2019). The impact of internal, external and enterprise risk management on the performance of micro, small and medium enterprises. Sustainability, 11(7), 2172. https://doi.org/10.3390/su11072172
Hansen, A. H. (1941). Defense financing and inflation potentialities. The Review of Economics and Statistics, 23(1), 1–7.
Harahap, I., & Tambunan, K. (2022). The Effect of SBI and SBIS as Monetary Instruments on the Indonesian Economy. Share: Jurnal Ekonomi Dan Keuangan Islam, 11(1), 1–19. http://dx.doi.org/10.22373/share.v11i1.8603
Highfield, R., & Smiley, R. (1987). New business starts and economic activity: An empirical investigation. International Journal of Industrial Organization, 5(1), 51–66. https://doi.org/10.1016/0167-7187(87)90006-3
Hubbard, R. G., Kuttner, K. N., & Palia, D. N. (2002). Are there bank effects in borrowers’ costs of funds? Evidence from a matched sample of borrowers and banks. The Journal of Business, 75(4), 559–581.
Isaga, N. (2018). Access to bank credit by smallholder farmers in Tanzania: A case study. Afrika Focus, 31(1), 241–256.
Juraev, E., & G’Ofurjon, K. (2020). INFLATION RISK. Мировая Наука, 1 (34), 29–33.
Kawiryawan, N., & Hapsari, M. I. (2015). Pengaruh Tingkat Return Sertifikat Bank Indonesia Syariah (SBIS) Terhadap Penempatan Pada SBIS dan ROA Bank Umum Syariah di Indonesia. Jurnal Ekonomi Syariah Teori Dan Terapan, 2(11).
Kemenke. (2022). Ini Upaya Pemerintah Jaga Peran UMKM sebagai Tulang Punggung Perekonomian. Kementerian Keuangan RI. https://www.kemenkeu.go.id/informasi-publik/publikasi/berita-utama/Ini-Upaya-Pemerintah-Jaga-Peran-UMKM
Khan, M. S., Senhadji, A. S., & Smith, B. D. (2006). Inflation and financial depth. Macroeconomic Dynamics, 10(2), 165–182. https://doi.org/10.1017/S1365100506050152
Kominfo. (2023). Data UMKM. KEMENKOPUKM. https://kemenkopukm.go.id/data-umkm
Lamont, O. A. (2002). Macroeconomic forecasts and microeconomic forecasters. Journal of Economic Behavior & Organization, 48(3), 265–280. https://doi.org/10.1016/S0167-2681(01)00219-0
Muhfiatun, M., Syarifah, L., & Salam, A. N. (2021). EFEKTIFITAS INSTRUMEN MONETER SYARIAH TERHADAP PENYALURAN DANA KE SEKTOR USAHA MIKRO KECIL MENENGAH (UMKM) DI INDONESIA. Al-Mashrof: Islamic Banking and Finance, 2(1), 1–15. https://doi.org/10.24042/al-mashrof.v2i1.8743
Muliadi, M., Darma, D. C., & Kasuma, J. (2020). MSMEs as mediation in the effects of investment credit, interest rates, and labor on economic growth: Evidence from Indonesia. International Journal of Finance & Banking Studies (2147-4486), 9(2), 01–12. https://doi.org/10.20525/ijfbs.v9i2.702
Muwazir, M. R., & Anwar, D. (2018). The Role of Sharia Monetary Instrument in Liquidity Management and Performance Improvement of Islamic Banking Financial in Indonesia. Al-’Adalah, 15(2), 389–414. https://doi.org/10.24042/adalah.v15i2.3200
Nasution, S. J., & Sudiarti, S. (2023). Analisis Pengaruh Sertifikat Bank Indonesia Syariah (SBIS), Nilai Tukar (Kurs) Dan Inflasi Terhadap Pembiayaan Bermasalah Perbankan Syariah Di Indonesia Periode 2018-2021. Jurnal Ilmiah Ekonomi Islam, 9(1), 726–731.
Nursini, N. (2020). Micro, small, and medium enterprises (MSMEs) and poverty reduction: Empirical evidence from Indonesia. Development Studies Research, 7(1), 153–166. https://doi.org/10.1080/21665095.2020.1823238
Pradesyah, R., & Triandhini, Y. (2021). The Effect Of Third Party Funds (Dpk), Non Performing Financing (NPF), And Indonesian Sharia Bank Certificates (SBIS) On Sharia Banking Financing Distribution In Indonesia. International Journal of Business, Economics, and Social Development, 2(2), 72–77.
Priyadi, U., Utami, K. D. S., Muhammad, R., & Nugraheni, P. (2021). Determinants of credit risk of Indonesian Sharīʿah rural banks. ISRA International Journal of Islamic Finance, 13(3), 284–301.
Ramadhan, M. M., & Beik, I. S. (2013). Analisis pengaruh instrumen moneter syariah dan konvensional terhadap penyaluran dana ke sektor usaha mikro kecil dan menengah (umkm) di indonesia. AL-Muzara’ah, 1(2), 175–190. https://doi.org/10.29244/jam.1.2.175-190
Riadi, S. (2018). The effect of Third Parties Fund, Non Performing Loan, Capital Adequacy Ratio, Loan to Deposit Ratio, Return On Assets, Net Interest Margin and Operating Expenses Operating Income on Lending (Study in Regional Development Banks in Indonesia). 1015–1026.
Serrano, A. S. (2021). The impact of non-performing loans on bank lending in Europe: An empirical analysis. The North American Journal of Economics and Finance, 55, 101312.
Sidrauski, M. (1967). Inflation and economic growth. Journal of Political Economy, 75(6), 796–810.
Soemitra, A., Ismal, R., Fuadi, F., Al-Amin, H., Harianto, S., Nur, M. M., & Hakim, A. F. (2021). Analysis Of Islamic Monetary Policy Transmission On Business Sector And MSME Performance. E-Mabis: Jurnal Ekonomi Manajemen Dan Bisnis, 22(2), 66–76.
Sri, A., Anggraini, R., Gurendrawati, E., & Hasanah, M. (2013). The Influence of Third-Party Funds, Car, Npf and Roa Against the Financing of A General Sharia-Based Bank in Indonesia. 20, 23.
Supriyatni, R., & Nurjamil, N. (2021). The Urgency of Handling Non-Performing Financing in Sharia Banks in the Development of Indonesian Sharia Economics. PADJADJARAN Jurnal Ilmu Hukum (Journal of Law), 8(1), 26–46. https://doi.org/10.22304/pjih.v8n1.a2
Thornton, J., & Di Tommaso, C. (2021). The effect of non‐performing loans on credit expansion: Do capital and profitability matter? Evidence from European banks. International Journal of Finance & Economics, 26(3), 4822–4839. https://doi.org/10.1002/ijfe.2042
Umar, M., Maijama’a, D., & Adamu, M. (2014). Conceptual exposition of the effect of inflation on bank performance. Journal of World Economic Research, 3(5), 55–59.
Vithessonthi, C. (2016). Deflation, bank credit growth, and non-performing loans: Evidence from Japan. International Review of Financial Analysis, 45, 295–305.
Wahyudi, I., & Sani, G. A. (2014). Interdependence between Islamic capital market and money market: Evidence from Indonesia. Borsa Istanbul Review, 14(1), 32–47. https://doi.org/10.1016/j.bir.2013.11.001
Warjiyo, P., & Agung, J. (2002). Transmission Mechanisms of Monetary Policy in Indonesia. Directorate of Economic Research and Monetary Policy, Bank Indonesia.
Widiyono, T. (2022). Juridical Review of Credit Collateral within Financial Engineering in Indonesia: An Introduction. JL Pol’y & Globalization, 121, 1.
Published
2023-07-26
How to Cite
Ponirah, A., Setiawan, I., Adisaputra, A. K., Sakinah, G., Wardiyah, M. L., & Gojali, D. (2023). Determining Factors Affecting MSME Financing: Efforts to Increase the Macroprudential Inclusive Financing Ratio. Annual International Conference on Islamic Economics and Business (AICIEB), 3, 75-84. https://doi.org/https://doi.org/10.18326/aicieb.v3i0.452
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