PERAN LEMBAGA KEUANGAN MIKRO DALAM PEMBERDAYAAN EKONOMI MASYARAKAT KECIL MENENGAH

The theme of the article is the banks and financial institutions. Small and medium-sized enterprises desperately need the role of Sharia Microfinance Institutions primarily in terms of capital used to expand the market and expand its business so that it contributes greatly in the national economy. The role of Islamic microfinance institutions could have been tested and overcome the economic crisis for some time and even strengthened. UMKM including business units that rely heavily on LKMS in the long term for the good of the Indonesian economy, it is not surprising that many people are looking at LKMS, but the attention given has not fully addressed the fundamental issues facing LKMS so that it can really strengthen and develop a financing institution for UMKM are mainly small communities. Judging from the potential and funding sources that have been running, in fact LKMS has adequate funding in serving its customers and in the management of funds based on sharia. If the management of funds made by Islamic financial institutions can coordinate with each other, then it can be used as a great force .

Law No. 1 of 2013 concerning Microfinance Institutions was born, LKMS in Indonesia are known as Baitul Mal wa Tamwil (BMT) or Sharia Savings and Loans and Financing Cooperatives (KSPPS) which are generally incorporated as cooperatives. Based on sharia principles, cooperatives are legally incorporated under the supervision of the ministry of cooperatives and small and medium enterprises. The existence of this dualism of legal regulations has led to overlapping regulations, supervision and guidance by related agencies, as well as contradictions in the regulations between one another. This legal problem requires a solution through the reformulation of legal regulations relating to Islamic MFIs. Microfinance institutions (MFIs) in Indonesia are currently growing rapidly and have an important role in improving the people's economy. The rapid development of this MFI is because almost 51.2 million units or 99.9% of business actors in the Indonesian economy are dominated by micro and small business units (Ali sakti: 2013). MFIs can be said to be one of the important pillars in the financial intermediation process needed by small and medium-sized communities for consumption and production as well as storing their business results. In Indonesia, MFIs are regulated in Law no. 1 of 2013 concerning Microfinance Institutions. According to Article 1 (1) of Law no. 1 of 2013 concerning Microfinance Institutions, what is meant by MFIs are: financial institutions specifically established to provide business development services and community empowerment, either through loans or financing in micro-scale businesses to members and the public, managing deposits, as well as providing development consulting services business that is not solely for profit. Based on the definition above, it can be understood that an MFI is a financial institution that functions as an intermediary institution that aims not only to seek profit (profit motive), but also has other goals, namely social motives whose activities are more in the nature of community development.

PurposeGlobally, women have been recognized as key contributors toward livelihood and poverty eradication, especially in developing countries in sub-Saharan Africa. This is due to their great involvement and participation in micro small and medium enterprises (MSMEs) that create employment and ultimately economic growth and development. Thus, the main purpose of this study is to establish the mediating role of social cohesion in the relationship between microfinance accessibility and survival of women MSMEs in post-war communities in sub-Saharan Africa, especially in Northern Uganda where physical collateral were destroyed by war.Design/methodology/approachThe data for this study were collected using a pre-tested semi-structured questionnaire from 395 women MSMEs who are clients of microfinance institutions in post-war communities in Northern Uganda, which suffered from the 20 years' Lord Resistance Army (LRA) insurgency. The Analysis of Moment Structures (AMOS) software was used to analyze the data and the measurement and structural equation models were constructed to test for the mediating role of social cohesion in the relationship between microfinance accessibility and survival of women MSMEs in post-war communities.FindingsThe results revealed that social cohesion significantly and positively mediate the relationship between microfinance accessibility and survival of women MSMEs in post-war communities in Northern Uganda. The results suggest that the presence of social cohesion as a social collateral promotes microfinance accessibility by 14.6% to boost survival of women MSMEs in post-war communities where physical collateral were destroyed by war amidst lack of property rights among women. Similarly, the results indicated that social cohesion has a significant influence on survival of women MSMEs in post-war communities in Northern Uganda. Moreover, when combined together, the effect of microfinance accessibility and social cohesion exhibit greater contribution towards survival of women MSMEs in post-war communities in Northern Uganda. Indeed, social cohesion provides the social safety net (social protection) through which women can access business loans from microfinance institutions for survival and growth of their businesses.Research limitations/implicationsThis study concentrated mainly on women MSMEs located in post-war communities in developing countries in sub-Saharan Africa with a specific focus on Northern Uganda. Women MSMEs located in other regions in Uganda were not sampled in this study. Besides, the study focused only on the microfinance industry as a major source of business finance. It ignored the other financial institutions like commercial banks that equally provide access to financial services to micro-entrepreneurs.Practical implicationsThe governments in developing countries, especially in sub-Saharan Africa where there have been wars should waive-off the registration and licensing fees for grass-root associations because such social associations may act as social protection tools through which women can borrow from financial institutions like the microfinance institutions. The social groups can provide social collateral to women to replace physical collateral required by microfinance institutions in lending. Similarly, the governments, development agencies, and advocates of post-war reconstruction programs in developing countries where there have been wars, especially in sub-Saharan Africa should initiate the provision of group business loans through the existing social women associations. This may offer social protection in terms of social collateral in the absence of physical collateral required by the microfinance institutions in lending. This may be achieved through partnership with the existing microfinance institutions operating in rural areas in post-war communities in developing countries. Additionally, advocates of post-war recovery programs should work with the existing microfinance institutions to design financial products that suit the economic conditions and situations of the women MSMEs in post-war communities. The financial products should meet the business needs of the women MSMEs taking into consideration their ability to fulfil the terms and conditions of use.Originality/valueThis study revisits the role of microfinance accessibility in stimulating survival of women MSMEs as an engine for economic growth in the presence of social cohesion, especially in post-war communities in sub-Saharan Africa where physical collateral were destroyed by war. It reveals the significant role of social cohesion as a social protection tool and safety net, which contributes to economic outcomes in the absence of physical collateral and property rights among women MSMEs borrowers, especially in post-war communities.

Small-scale enterprises highly influence the growth of a country. Small-scale enterprises are fundamental in creating employment opportunities for many people, notably in rural areas. Consequently, the study was determined to examine the role of financial institutions in the growth of small and medium enterprises in Japan. The study did a literature review to explore the findings from the preceding studies. The study findings from the majority of the studies showed that financial institutions play a critical role in the growth of small and medium enterprises. The financial institutions provide services and loans that spur the growth of small and medium enterprises. In addition, the financial institutions are involved in providing the startup capital and this increases the sustainability of the small firms. In some instances, the financial institutions provide capacity building to the small enterprises, increasing their skills and knowledge in the management process. The small-scale enterprises encounter many difficulties and the financial instructions become a channel for accessing funds. The factors that limit small and medium enterprises from accessing the loans from the financial institutions is mainly lack of collateral. The study concluded that financial institutions determined the growth of small and medium enterprises in Japan to a large extent. The study recommended that drastic and effective financial policies which directly increase accessibility to available credits from financial institutions ought to be set in Japan. The government needs to sale up a framework that will make the financial institutions increase their lending to the small and medium enterprises. A specialized borrowing system needs to be developed in the financial institutions to carry out small-scale lending functions. Keywords: Financial institutions, growth, small scale enterprises, Japan

Present paper looks at how rural business incubators (RBIs) and enterprise resource centers (ERCs) together with micro finance institutions (MFIs) can contribute to inclusive growth. India’s informal sector has a very powerful presence of brilliant entrepreneurs, who can potentially contribute to India’s fight against poverty and have the potential for much more employment and income generation, if appropriate institutional mechanisms are created to provide needed and timely assistance. Here comes the role of RBIs and ERCs and MFIs. Approximately 93% of the enterprises are in the informal sector in India. Together with micro, small and medium enterprises (MSMEs), informal sector contributes close to 60% to GDP and 40% or more to export trade. They create 95% of non-farm jobs. Informal enterprises are set-up by owners to alleviate their poverty condition. They could be termed as poverty alleviating enterprises (PAEs). Micro finance institutions need to reach out to such PAEs and empower them. Through the institutional mechanism called RBIs and ERCs, micro financiers can reach out to PAEs. Empowering PAEs and enabling their growth is indeed a challenging task. An institutional mechanism like RBI and ERC is a probable solution to poverty and unemployment. If an incubator and ERC can come up in each of the 6000 block panchayats that would enable the creation of new enterprises in the formal sector as well as can contribute to empower PAEs in their growth and expansion. This would help create new jobs and alleviate poverty and generate employment. The paper ends with a model RBI and ERC, with a detailed description of service mix that can be delivered through this institutional mechanism. Key words: Micro, small and medium enterprises (MSMEs), rural business incubutors, poverty alleviation, employment generation, rural transformation, information needs of MSMEs.

 Abstract—This study aims to produce a model of the development and implementation of Micro Financial Institutions (MFIs) in the rural areas as an alternative source of financing for rural MSEs that is estimated to have a role in creating jobs and reducing poverty once they are empowered. The study uses a Descriptive Comparative Method and a Survey Method. The results of this study indicate that the development of Micro Finance Institutions should be supported by equipping them with the ability to access the capital from certain sources provided by the government through the designated banks. Besides the financial aspect, the development of micro and small enterprises also requires other aspects such as sustainable development, mentoring, and technical assistances. who are not served by formal financial institutions. Centralization of financial institutions in big cities is an economically rational fact. However, most of the micro and small enterprises is in the rural areas and many of them are informal, yet, able to employ a lot of people. The majority of MSEs are concentrated in rural areas which are needed to develop those areas into more competitive areas globally, so that villages can be an economically effective place for investment through local funding using a system that suits the characteristics of the business. Therefore, it is the time for the financial institutions to change their orientation, from being urban financial institutions to being rural financial institutions. This orientation shift is necessary in order to support the development of rural areas to be competitive in the current global economic order. Microfinance institutions in the rural areas can be an alternative to solving the problems faced by small and micro enterprises in the rural areas. This institution will function as the center for the capital mobilization in the rural areas. The role of micro and small enterprises is really strategic;

Small and Medium Scale Enterprises constitute essential ingredients in the lubrication and development of any economy. In Nigeria, the story makes no remarkable difference as Small and Medium Scale Enterprises dominate the economy. Government over the years has formulated a number of policies aimed at developing Small and Medium Scale Enterprises. While most policies actually failed due to poor implementation, others however, succeeded. Efforts have been made in the past to identify the role of Small and Medium Scale Enterprises to the development of Nigeria’s economy, its problems and prospects which created a vacuum on the role of government and other financial institutions in the development of Small and Medium Scale Enterprises. It is this vacuum created by previous researchers that prompted this write up. It is therefore the thrust of this paper to identify the role of government and other financial institutions particularly micro finance institutions in the development of small and medium scale enterprises in Nigeria. Relevant literatures were reviewed to bring out salient issues on the subject matter of this paper. The chief source of information for this write up is secondary method of data collection. It was discovered that financial institutions provide the necessary financial lubricant that facilitate the development of Small and Medium Scale Enterprises, but, a lot still need to be done by the government in terms of policy formulation in order to complement the efforts of financial institutions. This paper recommends among others, further establishment of micro finance institutions to serve the grass root financial needs, sensitization of the general public on how to access funds for SMEs development, public private partnership should also be

Characteristics of Financial Technology as a Financial Institution that uses information technology to provide financial solutions by prioritizing compliance with the principles of prudence and risk management. The characteristics of Financial Technology institutions are getting a loan quickly; Makes Payment Easier; Make Loan Payments without Additional Fees. Peer to Peer Lending (P2P lending) system in providing financial services is done through information technology based. The financial services institution Peer to Peer Lending (P2P Lending) is a financial technology financial institution (Fintech). Financial Technology (Fintech) as a Literacy Source for Financing Micro, Small and Medium Enterprises; Financial Technology (Fintech) As a Facilitator in MSME Development; Financial Tecnology (Fintech) as a driver for Micro, Small and Medium Enterprises to Increase National Financial Inclusion. The Role of the Financial Services Authority (OJK) and the Indonesian Joint Funding Fintech Association (AFPI) As Regulations and Oversight of Financial Technology Institutions (Fintech) in Indonesia.

<p>Micro Finance Institutions (MFIs) rejuvenate economic prowess in developing countries, after severe shocks like wars, droughts and floods. MFIs are a promising tool to tackle poverty and improve food security. Sustainability of MFIs based on their capital structure ensures sustainability in poverty reduction and improved food security. The limited literature on the impacts of capital structures on MFI performance necessitated the study. Panel data from 14 MFIs was collected based on availability and accessibility. The sources of data were financial and income statements covering five years. Econometric analysis using STATA software was done following methodologies of Bogan and Rosenberg. MFIs lent to both individuals and groups and 79% were not regulated by the Central Bank, 86% had their funding sources as loans, grants, excluding deposits/savings and 73% attained operational self-sufficiency. Debt and grants were negatively correlated to operational and financial sustainability. When sustainability was more constricted to financial sustainability, debt and share capital remained noteworthy. Other than grants, debt was paid back on competitive market interest rates most especially debts from money lenders, whereas share capital fetched in revenues to the MFIs at market interest rates from the borrowers. Grants and debt had a substantialdamagingconsequence on MFI performance. Capital structure was essential in MFIs’ sustainability. MFI specific characteristics, like management were also important. Subject to sampling uncertainties, the results indicate that adding to regulation by Central Bank, MFIs must specialize their lending to reduce portfolio at risk. MFIs must reduce dependence on debts and grants and resort to accumulating share capital for long-term sustainability.</p>

Empirical evidence shows that the contribution of Micro, Small and Medium Enterprises Empirical evidence shows that the contribution of Micro, Small and Medium Enterprises (MSMEs) to gross domestic product growth, job creation, and poverty alleviation is high. Because of limited access to finance and other factors, a significant number of MSMEs, particularly in developing countries, cannot realize their full potential. The study investigates the micro, small, and medium enterprises' access to finance challenges from the supply-side perspective in Ethiopia. The study employed descriptive analysis using survey data collected from purposely selected 11 banks and 9 micro-finance institutions (MFI). The results show that the lack of collateral, unavailability of financial records, poor pre-loan savings, low loan repayment rate, business feasibility problems, credit information asymmetry, attitudinal problems of the MSMEs, and diversion of the loan are demand-side constraints. From the financial institution’s perspective, the result shows that the liquidity problem, the influence of unfair competition from government banks, the lack of competent human resources, political leaders’ intervention, especially in MFI, corruption, the COVID-19 pandemic, political instability, and inadequate capital are major obstacles. Macroeconomic conditions related to challenges such as foreign exchange shortages, inflation, and trade imbalances are also mentioned as major obstacles. According to the findings of this study, designing and implementing business skill development in mindset, business planning, business bookkeeping, and financial reports can help MSMEs access loans. For financial institutions, the study suggests cash flow-based lending products, applying psychometric testing for credit scoring, improving the governance of the government-affiliated MFIs, and automating the MFIs. JEL Classification Codes: G21, G23, G32.

In evolution of global business, entrepreneurs have faced a number of new dares as they get into rivalries in their respective industries. Small and Medium Enterprises (SMEs) financing by Micro Financing Institutions (MFIs) has been one of the areas of interest to establish the credibility of loans provided by the said funding institutions. The purpose of this study was to determine MFIs loans credibility for the sustainability of SMEs in Tanzania. The specific objectives of the study were two, namely: to analyze the MFIs loans credibility on financial sustainability of the SMEs in Arusha City; and, to establish the effective supportive mechanisms for MFIs loans sustainability to SMEs in Arusha City. The study was a mixed quantitative and qualitative in approach, adopted a multiple case study design; involving few selected SMEs in Arusha – Tanzania. The study used qualitative and quantitative data gathered by the use of research schedules. The collected data were analyzed by the aid of Statistical Package for Social Sciences (SPSS) v.16 software. Descriptive statistics such as: frequencies, percentages, and mean were tabulated for giving gist to data; and hence, drawing the conclusion. The results in this study meant to help the stakeholders to ascertain whether MFIs’ loans provided by the said institutions are credible enough to ensure the sustainability of the funded SMEs or not. The study revealed that, the credibility of MFIs loans is impaired by; borrowers lack of collateral; lack of trainings; institutional corruptions; high interests attached to loans and inadequate grace periods provided to borrowers, among others. The study recommends the link between SMEs success and MFI’s group landing model be an area for future studies; in assessing its effectiveness for the said parties’ mutual growths.

Micro finance institutions in Indonesia has already established since long time in helping people economy in rural areas, including in Bali. Its role to support micro and small businesses has also showed that those financial institutions become much more needed by rural society to boost their economy. This research aims to know the development and role of micro finance institutions as well as their challenges as one of financial institutions in the Bali Province. The number of micro finance institution, which said as Lembaga Perkreditan Desa in Bali has, in fact, significantly grown by 1.421 units and its asset reached Rp. 11.4 trillion in 2014. This research uses descriptive methods within qualitatives research approach. This research, applied a descriptive qualitative method shows that the micro finance development and its role in Bali is fairly good; this can be seen from the total saving they can collect which reached Rp. 12,5 trillion. Nevertheless, for the sake of the safety of public savings, there is a need to set up a special agent which can cooperate with local government bank, such as Bank Pembangunan Daerah Bali and Otoritas Jasa Keuangan.

BMT Amanah Sariah provides savings, financing, payment, deposits services, focusing on serving MSMEs using easy procedures and mechanisms, and being in the midst of small or rural communities. BMT as an extension of Islamic Banks can channel the financing that has been entrusted to it. The research objective was to determine the role of financial institutions in empowering small micro enterprises. This type of research is qualitative research. The data obtained through observation, interviews, and documentation. The results of the study show that BMT Amanah Syariah Bekasi has good potential and role in supporting the empowerment of MSMEs that provide financing services to the community. In this case BMT Amanah Syariah Bekasi has also played a very important role in helping small communities who want to open a business, starting from starting a customer's business so that the customer's business develops. The roles of BMT Amanah Syariah Bekasi are: helping the capital of its members; Developing the entrepreneurial spirit of its members; Reducing usury practices; Improving the welfare of small communities; Improvement of human resources.

The study was specifically designed to identify challenges that small and medium enterprises face in accessing credit facilities from financial and non-financial institutions in Lusaka province of Zambia. The study adopted a descriptive analytical research and, incorporating quantitative and qualitative methodologies, the study made use of data collection tools, such as questionnaires and structured interviews. The study targeted 100 SMEs from the central business district and a total number of 80 as a sample size(s). The criteria used was based on arranging SMEs in various categories, such as restaurants, saloons, barbershops, computer services and poultry farming, most SMEs are facing challenges in accessing financial support from financial institutions, such as banks and microfinance institutions, hence, explored more to find out what the challenges are and how these challenges can be mitigated to ensure that all SMEs have equal opportunities to financial services at national or provincial level. The samples will be randomly collected and will analyse data using excel and content analysis tools. The research focuses on achieving the following objectives: 1. identifying challenges that SMEs face in Lusaka when accessing financial support from financial institutions within the town, and 2. establishing ways on how these challenges can be mitigated at town level.

The primary objective of this research is to assess the influence of Micro Financial Institutions (MFIs) on job creation in Kosovo by examining the relationships between MFI microcredits, consulting services, government coordination, interest rates, and so on. According to the September 2024 status, Kosovo's microfinance sector consists of 9 MFIs and 23 Non-Banking Financial Institutions (NBFIs). The findings of the linear regression analysis suggest that there is a weak relationship between the volume of microcredits granted by MFIs and the creation of new jobs, with p = 0.042, which is slightly lower than the significance value of 0.05. The MFI consultancies, MFI programs, and high interest rates of MFI microcredits show a substantial negative link with employment creation. The parameter β values are smaller than the values of p. Methodologically speaking, apart from secondary data, a survey connected to the purpose of the research was also conducted. MFIs have a number of challenges in creating jobs, including a lack of entrepreneurial training and financial skills, low institutional capacity, high interest rates, and so on. The study recommends that policy and strategy makers in Kosovo maximize job creation through MFIs by implementing an integrated approach.