LOAN SHARKS AND FINANCING ALTERNATIVES FOR FOOD MICRO-SMALL ENTERPRISES IN INDONESIA: A CASE STUDY

• Main Author: Fabrizio Derajo, Muhamad
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/68687
• Institution: Institut Teknologi Bandung

This study aims to examine the awareness and factors of financing source usages of micro and small enterprises in Jakarta, specifically the food-based micro and small businesses of the processing industry (FMSPIs). A sample of ten FMSPI owners was taken in Jakarta, Indonesia. This research used a semistructured interview. The findings imply that the respondents were aware of financing sources such as borrowing from banks, cooperatives, relatives, and moneylenders. The findings also imply that FMSPIs have the factor of risk aversion as their determinant in choosing a specific financing source. Specifically, the findings show that respondents tend to state that they do not want to borrow money because they prefer retained earnings as their source of financing. The respondents refrain from borrowing especially from banks, due to its specifications of the business that must become bankable. Another finding is that FMSPIs prefer borrowing from relatives with an equity scheme because of trust levels. All this may also imply that FMSPIs prefer equity financing instead of debt financing.