Abstract
Currently, the studies on entrepreneurial characteristics do not distinguish the business scales, while different scales of businesses, i.e. small, medium to large scales have their own characteristics. The purpose of this research was to determine whether business performance mediates the impact of entrepreneurial characteristics on accessing credit at small-scale business. In this study, a total of 221 questionnaires was distributed to the respondents of small enterprises entrepreneurs in West Sumatera Province, Indonesia using the method of the purposive random sampling. The hypotheses were tested using survey data from small enterprises that had obtained bank loan. For data analysis, the Structural Equation Model (SEM) was used. Based on the study results, the entrepreneurial characteristics positively affect the business performance, which then positively affects the chances of access to the credit. Ultimately, it was proven that entrepreneurial characteristics affect the access to credit. The research finding highlights the important of the role of business performance in mediating the effect of entrepreneurial characteristics on credit access. Therefore, it is recommended that there should be a strategy to strengthen the entrepreneurial characteristics to improve the small business performance. In addition, the entrepreneurs are recommended to develop and maintain a strong entrepreneurial characteristics.
Highlights
Small enterprises in Indonesia are still constrained with the limitations in operating their business, such as lack of capital, the poor quality of human resources, lack of access to the market and the limitation in skills and technology
This study examined the relationships between entrepreneurial characteristics, business performance and credit access at small business in West Sumatera, Indonesia
The findings show that all dimensions of entrepreneurial characteristics have positive value
Summary
Small enterprises in Indonesia are still constrained with the limitations in operating their business, such as lack of capital, the poor quality of human resources, lack of access to the market and the limitation in skills and technology. The concept of small business is classified by Regulation No 20, 2008 based on the asset and sales and according to the Central Bureau of Statistics based on the number of workforces. The limitation of capital and difficulties in accessing the source of funding are becoming a major problem for small business. According to BI & LPPI (2015), of 57 billion unit of micro small medium enterprises (MSMEs) in Indonesia, only 30% has the ability to access finance. 76.1% earned credits from banks, and the rest earned credit from non-bank It means that in Indonesia, 60 – 70% of MSMEs have no access to the banks credit. Finance from banks is a great financial source, they have difficulties to fulfill the bank requirements for obtaining the loan
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