Determining Factors Affecting MSME Financing: Efforts to Increase the Macroprudential Inclusive Financing Ratio

Setiawan, Iwan and Gojali, Dudang (2023) Determining Factors Affecting MSME Financing: Efforts to Increase the Macroprudential Inclusive Financing Ratio. Annual International Conference on Islamic Economics and Business, 3 (1). pp. 75-84. ISSN 2809-3445

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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.

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