Do microfinance interventions improve the performance of Microenterprises in Indonesia? a case study of BRI unit clients in Medan City, Indonesia

• Main Authors: Hawariyuni, Weni, Kassim, Salina
• Format: Conference or Workshop Item
• Language: English
• Published: 2014
• Subjects: H Social Sciences (General); HG Finance; HM Sociology
• Online Access: http://irep.iium.edu.my/42054/1/42054.pdf; http://irep.iium.edu.my/42054/

This study attempts to explore the performance of microenterprise before and after accessing BRI’s microproducts. It also attempts to compare the performance between the microenterprises which have access to KUPEDES and KUR products. The performance of the microenterprises is measured in terms of income, fixed assets, and household expenditures. In this regard, it focuses specifically on BRI Units located in Medan City, Indonesia. This study uses descriptive analysis as methodology. The main finding indicates that KUPEDES as original product of BRI Unit is more effective than KUR which is micro product subsidized by Indonesian government. This study also found that there are still some problems faced by microenterprises in accessing microloan. It is expected that policy makers of microfinance institutions (MFIs), including the BRI Unit and Indonesian government could solve the common problems faced by MSMEs, such as financing, raw materials, marketing, advanced technology, and others, as MSMEs play a crucial role in increasing economic growth in terms of reducing poverty and unemployment; and increasing GDP. In this respect, the policy makers of MFIs including the BRI Unit are also expected to provide the facilities besides credit services, such as training, health programmes, education, family planning, and other programmes to make greater effectiveness of the microfinance on the performance of microenterprises. Furthermore, the BRI and Indonesian government should also initiate efforts to ensure KUR microloans become as effective as KUPEDES microloans.