Micro, Small And Medium Enterprises Performance Research Articles

Islamic finance principles and performance of micro, small and medium enterprises (MSMEs) in Makindye Division Kampala District Central Uganda

Purpose Micro, small and medium-sized enterprises (MSMEs) are vital for economic growth in developing countries. Yet, little research has explored the link between Islamic principles and MSME performance, especially in Uganda. This study aims to investigate the relationship between Islamic financial principles and MSMEs’ performance in Makindye Division Kampala – Uganda. Design/methodology/approach This study used a correlational research design involving 86 respondents from 30 MSMEs between January and May 2023. Data collected through questionnaires was analyzed with Statistical Package for Social Sciences, examining three independent variables: ethicality, Halal investment and prohibition of riba, in relation to MSME performance. Findings The results revealed significant relationships between these variables and MSME performance. Prohibition of riba (r = 0.296, n = 86, p = 0.006), Halal investments (r = 0.308, n = 86, p = 0.004) and ethical principles (r = 0.283, n = 86, p = 0.008) all exhibited a statistically significant relationship. Regression analysis with R = 0.405, R2 = 0.164 and adjusted R2 = 0.134 indicated that all hypothesized variables were significant predictors of MSME performance. Based on findings, this study rejected the null hypothesis, confirming a moderately positive and significant relationship between Islamic financial principles and MSME performance. Originality/value This study underscores the importance of active involvement from key stakeholders such as the Uganda Halal Bureau, Uganda Muslim Supreme Council, Islamic financial institutions and government agencies in integrating robust support mechanisms for MSMEs into their strategic frameworks. Such efforts could enhance Uganda’s economic landscape, aligning with the experiences of Malaysia and Indonesia in leveraging Islamic principles for economic growth.

Unlocking Economic Landscape: Understanding the Dynamics of Financial Challenges, Business Traits, Financial Resources, Growth Phases, Financial Accessibility, and MSME Performance

Ease of access to finance serves as a driving force for the development of entrepreneurship. Entrepreneurship, in turn, has the capability to stimulate the creation of new employment opportunities. Sound financial access is crucial for supporting the sustainability and growth of the Micro, Small, and Medium Enterprises (MSMEs) sector. The objective of this research is to delve deeper into the challenges faced by MSMEs in accessing finance and analyze its influence on the business performance of MSMEs. The survey for this research was conducted on 324 MSMEs in the South Sumatra Province. The sample selected used the quota sampling technique. The research framework was developed and tested using a Structural Equation Model (SEM). The research findings indicate that business traits, financial resources, and growth phases of MSMEs have a significantly positive impact on financial access, while financial challenges have a negative impact that hinders the growth of MSMEs and affects overall MSME Performance.

The Influence of the Use Financial Technology, Owner Financial Literacy, and Risk Tolerance on the Performance of MSMEs in Indonesia

This study investigates the influence of financial technology adoption, owner financial literacy, and risk tolerance on the performance of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia. Amidst the diverse landscape of Indonesian MSMEs, characterized by challenges in accessing formal financial services, the study examines the role of FinTech in overcoming these barriers and fostering business growth. Additionally, it explores the significance of owner financial literacy in facilitating informed decision-making and the strategic importance of risk tolerance in driving business innovation. Through a quantitative research design and Partial Least Squares Structural Equation Modeling (PLS-SEM) analysis, the study offers insights into the nuanced relationships between these factors and MSME performance. The findings provide actionable insights for policymakers, financial institutions, and MSME owners, aiming to promote sustainable MSME development and economic prosperity in Indonesia.

Strategi Klasterisasi UMKM Berbasis Kearifan Lokal pada Kabupaten dan Kota di Provinsi Jambi

This study aimed to assess how local wisdom integration and clustering strategies impact the performance of Micro, Small, and Medium Enterprises (MSMEs) in Jambi Province, using a mixed-method approach. It was found that both local wisdom and clustering significantly enhance MSME performance by adding value, differentiating products, and improving access to resources, innovation, and operational efficiency. The research underscores the critical role these strategies play in MSME development. Consequently, it suggests that MSME managers, investors, and policymakers should support initiatives promoting the integration of local wisdom and the development of clusters to boost MSME competitiveness and growth in Jambi Province. This approach demonstrates a viable pathway for MSMEs to enhance their performance and sustainability.

Driving Fractions of Business Model Innovation (BMI) among the Micro, Small and Medium Enterprises (MSME)

The purpose of this study is to investigate how changes in business models in Micro, Small, and Medium Enterprises (MSME) affect company performance. This quantitative study tested the connection between business model innovation drivers, innovation results, and MSME performance. 300 of the MSME owner data are recorded by the questionnaire and used this data collection method. The recorded data are evaluated using SEM-PLS. The results showed that the forces driving innovation in business models have a positive impact on their outcomes, so MSME managers gain knowledge about how innovative business models can support MSME to overcome resource limitations and achieve sustainable growth

Pengaruh Inklusi Keuangan, Literasi Keuangan, Inovasi dan Pengelolaan Keuangan Terahdap Kinerja UMKM di Yogyakarta

Micro, Small and Medium Enterprises (MSMEs) are to grow and develop businesses in order to build a national economy based on a just economic democracy. MSMEs in Indonesia have a significant contribution or role in expanding and absorbing new workers. MSMEs themselves have the advantage of producing consumer goods and services that are close to the needs of the community. There is still an obstacle that MSME actors still lack an understanding of the effects of inclusion, financial literacy, innovation and financial management in various types of businesses, especially on the performance of MSME by business actors. The reason of this consider is to decide the impact of budgetary incorporation, budgetary proficiency, advancement and monetary administration on the execution of MSMEs. The test measure utilized was 100 respondents who claim businesses. The examining method utilized in this ponder utilized a focused on inspecting procedure and the information were analyzed utilizing numerous relapse investigation to test the speculations. The comes about of this think about appear that the affect of monetary incorporation features a positive and significant affect on MSME execution, money related proficiency incorporates a negative and noteworthy affect on MSME execution, and development contains a positive affect on MSME execution. However, the impact is small, financial management has a positive impact on MSME performance, while financial management has a significant impact on MSME performance. It has a positive effect and has a significant impact on MSME performance.

Determinasi Literasi Keuangan, Inklusi Keuangan dan Literasi Digital terhadap Kinerja Usaha Mikro Kecil Menengah: Studi pada UMKM di Kabupaten Sumenep


 This research aims to examine the influence of financial literacy, financial inclusion and digital literacy on the performance of micro, small and medium enterprises (MSMEs). This research is quantitative research. The population in this study were all MSMEs in Sumenep Regency using a purposive sampling technique. The sample included in the test criteria was 108 respondents. Test results using multiple linear regression show that financial literacy and digital literacy have an effect on MSME performance, while financial inclusion has no effect on MSME performance.
 Keyword: financial literacy, financial inclusion, digital literacy, MSMEs

HUMAN CAPITAL AND PERFORMANCE OF MICRO, SMALL AND MEDIUM ENTERPRISES: A LITERATURE REVIEW

This research aims to examine aspects of human capital that influence the performance of Micro, Small, and Medium Enterprises (MSMEs). Drawing on an extensive review of literature from indexed journal databases, the study focused on identifying key factors related to "human capital" and "MSME performance." The comprehensive exploration revealed a multifaceted relationship between human capital aspects and MSME performance, unveiling pivotal influencers. The identified aspects of human capital found to exert a substantial influence on MSME performance encompass a wide spectrum. These include skills and competencies, education and training, employee motivation and engagement, employee health and welfare, innovation and creativity, communication and collaboration, digital skills, work ethics and organizational values, entrepreneurship and sense of ownership, as well as organizational diversity. This research contributes valuable insights for policymakers aiming to enhance the human capital capabilities of MSME entrepreneurs. By addressing these specific dimensions, policymakers can formulate targeted strategies to uplift the human capital landscape within MSMEs. Consequently, this targeted approach is anticipated to render MSMEs more productive, sustainable, and equipped to venture into international markets.

PENGARUH E-PAYMENT SERVICES DAN E-COMMERCE SERVICES TERHADAP KINERJA UMKM YANG DIMEDIASI OLEH DIGITALIZATION KNOWLEDGE “STUDI KASUS PADA UMKM FOOD AND BEVERAGE DI DAERAH ISTIMEWA YOGYAKARTA”

The advancement of information technology and the COVID-19 pandemic has prompted Micro, Small, and Medium Enterprises (MSME) to shift towards e-payment and e-commerce services. This research aims to investigate the influence of E-Payment and E-Commerce services on the performance of MSME in the food and beverage sector in the Special Region of Yogyakarta, with digital knowledge as a mediator. The study employs the quantitative analysis method of Partial Least Square (PLS) involving 255 MSME. The results reveal that E-Payment services do not significantly impact MSME performance, while E-Commerce services have a significantly positive effect. Digital knowledge mediates the positive relationship between E-Payment and E-Commerce services and MSME performance. The implication is that MSME needs to consider more integrated strategies in adopting technology in this digital era to enhance their performance.

Exploring The Relationship Between Entrepreneurial Networking, Entrepreneur Leadership, Innovation capability, and MSMEs Performance

This research aims to determine the role of entrepreneurial networks, entrepreneur leadership, on innovation capabilities and MSME performance. The sampling technique used purposive sampling, obtaining a total of 247 samples of MSME owners in the culinary sector in Bojonegoro City. Research data was analyzed using SEM techniques with AMOS software. The research results show that entrepreneurial networking has a positive effect on the innovation ability and performance of MSMEs. Meanwhile, entrepreneurial leadership has no effect on the innovation ability of MSMEs, but has a positive influence on MSME performance. The implications of this research are that the development of entrepreneurial networks can be a crucial factor in enhancing innovation capabilities and performance for Micro, Small, and Medium Enterprises (MSMEs) owners in the culinary sector in Bojonegoro City. Additionally, entrepreneurial leadership also plays a significant role in improving the performance of MSMEs, even though it does not have a direct influence on innovation capability. Therefore, in the effort to enhance the performance of MSMEs in the culinary sector, MSME owners should consider expanding their entrepreneurial networks and strengthening entrepreneurial leadership.

PENGARUH INKLUSI DAN LITERASI KEUANGAN TERHADAP KINERJA USAHA DENGAN KEBERLANJUTAN USAHA SEBAGAI VARIABEL INTERVENING PADA SEKTOR USAHA UMKM DI KOTA DEPOK

In Depok City, the MSME (Micro, Small and Medium Enterprises) business sector plays an important role in the local economy. However, most MSMEs in the city still face various challenges, including financial access issues and low financial literacy levels. Therefore, financial inclusion and financial literacy have the potential to have a positive impact on the business performance of MSMEs in Depok City. This study aims to test and analyze the effect of financial inclusion and financial literacy with business sustainability as an intervening variable in the MSME business sector in Depok City. This study involved MSME players in Depok City using the Non Probability sampling method with a population of 7911 which was processed using the Slovin formula into 100 research samples. The data were processed using the Partial Least Square- Structural Equation Modeling (PLS-SEM) method. This type of research is quantitative research, using primary data, the findings report that Financial Inclusion affects the Performance and Sustainability of MSME Businesses, Financial Literacy affects the Performance and Sustainability of MSME Businesses, as evidenced by Business Sustainability being able to mediate Financial Inclusion on MSME Performance and Business Sustainability being able to mediate Financial Literacy on MSME Performance. This can be a reference for MSME players to realize the importance of access to banking services to get the best results. finance so that it can improve the performance of MSMEs and their Business Sustainability. Based on the results of this study, many MSMEs continue to survive in their business activities, it is proven that they are able to survive for more than 5 years in Depok City.

Mengungkap Keterkaitan Inklusi dan Literasi Keuangan dengan Kinerja dan Keberlanjutan UMKM di Perkotaan

Within the economic landscape of Depok City, the Micro, Small, and Medium Enterprises (MSMEs) sector holds a pivotal position, contributing significantly to the local economy. Despite its importance, a myriad of challenges confront MSMEs in the city, encompassing issues related to financial access and insufficient financial literacy. Consequently, this study seeks to empirically examine and elucidate the influence of financial inclusion and financial literacy, with business sustainability serving as an intermediary variable within the MSME sector of Depok City. Utilizing the Non-Probability sampling method, this research engaged MSME participants in Depok City, with a population of 7911, employing the Slovin formula to determine a representative sample size of 200. Employing the Partial Least Square- Structural Equation Modeling (PLS-SEM) method for data analysis, this quantitative research aims to contribute valuable insights to the existing body of knowledge. The findings reveal a discernible impact of Financial Inclusion on both the Performance and Sustainability of MSMEs. Similarly, Financial Literacy emerges as a significant factor influencing the Performance and Sustainability of MSMEs. Furthermore, Business Sustainability is identified as a mediating factor, demonstrating its capacity to mediate the relationship between Financial Inclusion and MSME Performance, as well as between Financial Literacy and MSME Performance. This study serves as a valuable reference for MSME stakeholders, underscoring the imperative nature of accessible banking services for optimal financial outcomes. The results advocate for enhanced financial literacy as a means to fortify the performance and sustainability of MSMEs. In conclusion, the study attests to the resilience of many MSMEs in Depok City, substantiating their ability to endure and thrive in their business endeavors, evident by a sustained operational existence exceeding five years.

Effective Leadership and Social Entrepreneurship Engagement in Optimal MSMEs Performance

This study explores the synergistic relationship between effective leadership and social entrepreneurship engagement as key drivers for optimizing the performance of Micro, Small, and Medium Enterprises (MSMEs). As MSMEs play a pivotal role in fostering economic growth and societal well-being, understanding the nuanced dynamics that contribute to their success is paramount. The research delves into the multifaceted dimensions of effective leadership, encompassing transformative, servant, and inclusive leadership styles. It investigates how these leadership approaches influence organizational culture, employee motivation, and innovation within MSMEs. Moreover, the study examines the impact of social entrepreneurship engagement on MSMEs, emphasizing the integration of social and environmental responsibility into business practices. By employing a mixed-methods research design, including surveys, interviews, and case studies, the study aims to provide a comprehensive analysis of the interplay between leadership effectiveness, social entrepreneurship, and MSMEs performance. Preliminary findings suggest that organizations led by leaders who embrace adaptive and socially conscious strategies demonstrate increased resilience, employee satisfaction, and community engagement. The research contributes to both academic and practical perspectives by offering actionable insights for policymakers, business leaders, and entrepreneurs seeking to enhance MSMEs' contributions to sustainable development. The findings highlight the importance of cultivating leadership skills that prioritize ethical decision-making, stakeholder collaboration, and social impact.

Effective Leadership and Social Entrepreneurship Engagement in Optimal MSMEs Performance

This study explores the synergistic relationship between effective leadership and social entrepreneurship engagement as key drivers for optimizing the performance of Micro, Small, and Medium Enterprises (MSMEs). As MSMEs play a pivotal role in fostering economic growth and societal well-being, understanding the nuanced dynamics that contribute to their success is paramount. The research delves into the multifaceted dimensions of effective leadership, encompassing transformative, servant, and inclusive leadership styles. It investigates how these leadership approaches influence organizational culture, employee motivation, and innovation within MSMEs. Moreover, the study examines the impact of social entrepreneurship engagement on MSMEs, emphasizing the integration of social and environmental responsibility into business practices. By employing a mixed-methods research design, including surveys, interviews, and case studies, the study aims to provide a comprehensive analysis of the interplay between leadership effectiveness, social entrepreneurship, and MSMEs performance. Preliminary findings suggest that organizations led by leaders who embrace adaptive and socially conscious strategies demonstrate increased resilience, employee satisfaction, and community engagement. The research contributes to both academic and practical perspectives by offering actionable insights for policymakers, business leaders, and entrepreneurs seeking to enhance MSMEs' contributions to sustainable development. The findings highlight the importance of cultivating leadership skills that prioritize ethical decision-making, stakeholder collaboration, and social impact.

DOES PERFORMANCE IMPROVE SUSTAINABILITY? EMPIRICAL RESEARCH ON INDONESIAN MSMEs

Micro, Small, and Medium Enterprises (MSMEs) are business sectors known to play an essential role in the economic growth of a country, especially in Indonesia. In this context, the creative industry is one of the fastest-growing business sectors and the promotion of sustainable economic development is evident in the government's active support for improving the growth of MSMEs. Therefore, this study analyzes the impact of financial literacy and market orientation on the MSMEs performance and sustainability. The sample includes 95 respondents occupying the roles of owners or managers in the creative industry of Yogyakarta Province. The results show that financial literacy and market orientation positively impact performance and sustainability. The performance of MSMEs influences business sustainability but financial literacy has no significant impact. Therefore, the implications show the indispensable need for governmental assistance in improving the knowledge base of MSMEs owners concerning financial literacy and market orientation.

THE ROLE OF KNOWLEDGE CREATION IN MEDIATING THE EFFECT OF NETWORK CAPABILITY ON PERFORMANCE OF MICRO, SMALL, AND MEDIUM ENTERPRISES

Performance has received special attention in the context of Micro, Small, and Medium Enterprises (MSMEs) due to its important role in enhancing an organization's competitive advantage. This study aims to identify predictors of MSME performance. This study used a survey method with 240 respondents. We analyzed the data using Smart-PLS (Partial Least Square) for Structural Equation Modelling (SEM). The results show that Network Capability and Knowledge Creation positively affect MSME performance. Furthermore, Knowledge Creation acts as a mediator between them. This research provides further suggestions on how MSME owners can improve performance in their MSMEs.

Innovation capability and risk attitude mediate the effects of knowledge management and financial literacy on MSME performance

Halal micro, small and medium enterprises (MSMEs) play an important role in the economy, supporting the rapid development of the world's halal industry. The performance of halal MSMEs is influenced by knowledge management and financial literacy. Based on knowledge-based theory, which focuses on internal factors to explain business strategies, innovation capabilities and risk attitudes can mediate the influence of knowledge management and financial literacy on the performance of halal MSMEs. Data collected using quantitative proximity from a sample of 195 owners of halal MSMEs in Malang Raya, Indonesia, was analyzed using structural equation modeling (SEM). The findings showed that knowledge management and financial literacy affect the performance of MSMEs. The innovation ability and risk attitude of MSME owners mediate the effects of knowledge management and financial literacy on the performance of MSMEs. When knowledge is managed effectively, it creates unique capabilities that contribute to improved performance through innovation, realized through innovative products, and risk attitude, realized through optimized opportunities.

REVITALIZING MSMES : AN EXAMINATION OF BUSINESS STRATEGY, INNOVATION AND ACCOUNTING INFORMATION SYSTEMS FOR IMPROVED PERFORMANCE

Micro, small, and medium enterprises (MSMEs) are essential for economic growth globally. However, they often face problems like unclear business plans, a lack of innovation, outdated accounting systems, and difficulty adapting to changes in the business world. These challenges lead to poor financial management and limited access to the right financial information. To overcome these problems, it’s important for MSMEs to create clear business strategies, encourage innovation, improve their accounting systems, and become more adaptable to changes. As a result, MSMEs will perform better and contribute more to the local economy. This study examines the effect of business strategy, innovation, and accounting information systems on MSME performance in Kudus Regency, using a sample of 391. The results showed that business strategy, innovation, and accounting information systems partially positively affected the MSME performance. Innovation, as a moderation variable, is able to strengthen the effect of business strategy on MSME performance. However, the results also show that accounting information systems have not been able to moderate the effect of business strategies on MSME performance. This research provides valuable insights for MSMEs, highlighting the importance of developing and executing suitable business strategies, promoting innovations, and establishing effective accounting information systems to improve performance.

The Effect of Profit-Sharing on Productivity of Micro, Small, and Medium Enterprises (MSME) in Indonesia

Research on the effect of profit-sharing on large-scale enterprise productivity has been done in many countries. But previous study found an inconsistent results, that is profit sharing is not significantly influence productivity of MSMEs. This research aims to deepen more about the reason is this profit-sharing in its application have or don’t have a significant impact in increasing productivity of Micro and Small Enterprises in Indonesia. The qualitative research method used in this research is through in-depth interview techniques to seven respondents who are MSME entrepreneurs in the manufacturing sector with product types that vary between respondents. The purpose of this interview is to gather information about the system of wages and distribution of bonuses in MSMEs, which have different characteristics from large industries in general. The interview results show that there is profit sharing in Indonesia MSMEs, but it is not considered as financial compensation or work bonus that leads to the next performance target. However, most of them interpreted as "kindness" from MSME owners in form of financial or non-financial benefits. This research brings research implication that profit sharing on MSMEs are unique and can be applied in many forms. Even though in previous quantitative study, profit sharing is stated as not significantly influence the MSMEs productivity and performance, In some cases, profit sharing is proven to increase the motivation and loyalty of employees.

Financial Literacy and MSME Performance: Mediation and Moderation Analysis

This research examines the mediating role of access to finance, financial risk management, and competitive advantage in the relationship between financial literacy and Micro, Small, and Medium Enterprises (MSME) performance. This research also tests demographic factors such as the owner's gender, company size, company age, and number of employees in moderating the influence of the variables studied. The sample for this research is MSMEs in Jakarta Province, Indonesia. Five hundred and fifty MSMEs participated in the study using a web-based self-administered questionnaire. The data was analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM). The research results show that financial literacy positively affects access to finance, financial risk management, competitive advantage, and MSME performance. Access to finance, financial risk management, and competitive advantage positively affect MSME performance and can mediate the relationship between financial literacy and MSME performance. The research also uncovers the moderating role of demographic factors, suggesting that the strength of the connections between financial literacy, access to finance, financial risk attitude, competitive advantage, and MSME performance may vary based on these factors. These findings carry significant implications for owners, managers, and governmental stakeholders, emphasizing the importance of enhancing financial literacy among MSMEs to enhance their performance.