.png)
Digitalization Bankability and Resource Conversion in Explaining MSME Performance in an Emerging Economy
Abstract
This study examines whether internal business resources are converted into micro, small, and medium enterprise (MSME) performance through the same mechanism, or whether credit access operates selectively across different resource types. Grounded in the Resource-Based View, the study integrates firm characteristics, entrepreneurial characteristics, and information technology use within a single structural model in which credit access is positioned as a potential resource-conversion mediator rather than a universal one. Data were collected through a structured questionnaire from 384 credit-experienced micro-enterprises in Banten Province, Indonesia, all of which had prior or current access to formal financing, and were analyzed using covariance-based structural equation modeling (CB-SEM) estimated in LISREL. Firm characteristics significantly increased credit access (β=0.530, p<0.001) and directly improved performance (β=0.277, p<0.001), whereas entrepreneurial characteristics (β=0.201, p=0.281) and information technology use (β=0.089, p=0.535) did not significantly increase credit access, despite both showing significant direct effects on performance (β=0.261 and β=0.327, respectively). Credit access positively predicted performance (β=0.136, p<0.001) and partially mediated the effect of firm characteristics, while no comparable mediation was observed for entrepreneurial characteristics or information technology. Because several constructs were highly correlated and associated with elevated variance inflation factors, these path estimates are interpreted as an associational pattern of selective resource conversion rather than as isolated causal effects. The findings suggest that operational capability and financial legitimacy are not automatically acquired together: digital and entrepreneurial resources can strengthen business performance without necessarily generating the signals that formal lenders recognize. For MSME development policy and practice, these results indicate that strengthening digital and entrepreneurial capability should be paired with deliberate efforts toward business formalization and financial documentation if improved bankability is also a goal.
Keywords
Full Text:
PDFReferences
Ministry of Micro, Small and Medium Enterprises of the Republic of Indonesia, “Sistem Informasi Data Tunggal UMKM: Data UMKM Indonesia 2024–2025,” Jakarta, Indonesia, 2025.
Badan Pusat Statistik Provinsi Banten, Banten Province in Figures 2025, Banten, Indonesia, 2025.
Bank Indonesia, “MSME Financing and Credit Access in Indonesia,” Jakarta, Indonesia, 2025.
C. W. H. Cheong, M. H. Lee, and M. A. Weissmann, “Credit access, tax structure and the performance of Malaysian manufacturing SMEs,” International Journal of Managerial Finance, vol. 16, no. 4, pp. 433–454, 2020, doi: 10.1108/IJMF-08-2019-0308.
M. M. Isyaku and W. Balla, “Impact of credit facilities on performance of SMEs in Jalingo Metropolis,” TSU International Journal of Accounting and Finance, vol. 1, no. 3, pp. 115–133, 2022.
O. I. Ojonta and J. E. Ogbuabor, “Credit access and the performance of non-farm household enterprises: Evidence from Nigerian data,” International Journal of Sustainable Economy, vol. 13, no. 1, pp. 72–86, 2021, doi: 10.1504/IJSE.2021.113318.
A. D. Buchdadi, A. Sholeha, G. N. Ahmad, and Mukson, “The influence of financial literacy on SMEs performance through access to finance and financial risk attitude as mediation variables,” Academy of Accounting and Financial Studies Journal, vol. 24, no. 5, pp. 1–16, 2020.
A. K. Garg and P. N. Phaahla, “Factors affecting the business performance of small businesses in Sekhukhune,” Journal of Economics and Behavioral Studies, vol. 10, no. 4, pp. 54–67, 2018, doi: 10.22610/jebs.v10i4(J).2407.
N. Ndiaye, L. Abdul Razak, R. Nagayev, and A. Ng, “Demystifying small and medium enterprises’ performance in emerging and developing economies,” Borsa Istanbul Review, vol. 18, no. 4, pp. 269–281, 2018, doi: 10.1016/j.bir.2018.04.003.
S. Pattanayak and M. Kakati, “An empirical study on entrepreneurial traits and their impact on enterprise success,” Vilakshan–XIMB Journal of Management, vol. 20, no. 2, pp. 277–291, 2023, doi: 10.1108/XJM-09-2021-0249.
J. M. Polgan, S. Sutrisno, A. D. Kuraesin, Siminto, I. Irawansyah, A. Muna, and A. Ausat, “The role of information technology in driving innovation and entrepreneurial business growth,” vol. 12, pp. 586–597, 2023.
O. Oni, E. K. Agbobli, and C. G. Iwu, “Entrepreneurial orientation and performance of small business in Vryburg region North West Province South Africa,” Journal of Reviews on Global Economics, vol. 8, pp. 63–71, 2019, doi: 10.6000/1929-7092.2019.08.07.
E. T. Penrose, The Theory of the Growth of the Firm. Oxford, U.K.: Basil Blackwell, 1959.
D. Nurmadewi and M. Er, “Analyzing linkage between business process management capability and information technology: A case study in garment SMEs,” Procedia Computer Science, vol. 161, pp. 935–942, 2019, doi: 10.1016/j.procs.2019.11.202.
E. Benami and M. R. Carter, “Can digital technologies reshape rural microfinance? Implications for savings, credit, and insurance,” Applied Economic Perspectives and Policy, 2020, doi: 10.1002/aepp.13151.
C. Phan, S. Filomeni, and S. Kiong, “The impact of technology on access to credit: A review of loan approval and terms in rural Vietnam and Thailand,” Research in International Business and Finance, vol. 72, Art. no. 102504, 2024, doi: 10.1016/j.ribaf.2024.102504.
B. K. C. Essel, F. Adams, and K. Amankwah, “Effect of entrepreneur, firm, and institutional characteristics on small-scale firm performance in Ghana,” Journal of Global Entrepreneurship Research, vol. 9, no. 1, 2019, doi: 10.1186/s40497-019-0178-y.
O. O. Fatoki and F. Asah, “The impact of firm and entrepreneurial characteristics on access to debt finance by SMEs in King Williams’ Town, South Africa,” International Journal of Business and Management, vol. 6, no. 8, pp. 170–179, 2011, doi: 10.5539/ijbm.v6n8p170.
A. R. Kira and Z. He, “The impact of firm characteristics in access of financing by small and medium-sized enterprises in Tanzania,” International Journal of Business and Management, vol. 7, no. 24, 2012, doi: 10.5539/ijbm.v7n24p108.
M. Braun, I. Briones, and G. Islas, “Interlocking directorates, access to credit, and business performance in Chile during early industrialization,” Journal of Business Research, vol. 105, pp. 381–388, 2019, doi: 10.1016/j.jbusres.2017.12.052.
X. Wang, S. Lee, and S. W. Park, “The effect of entrepreneurial orientation, social network, and resource acquisition on firm performance in Chinese SMEs: The mediating effect of resource acquisition,” Global Business and Finance Review, vol. 25, no. 3, pp. 1–18, 2020, doi: 10.17549/gbfr.2020.25.3.1.
N. Firnalista, Nofialdi, and Z. Azriani, “Impact of entrepreneurial characteristics and access to credit on business performance of small business: Case of brown sugar processing in Agam District,” Indonesian Journal of Agricultural Research, vol. 3, no. 1, pp. 56–64, 2020, doi: 10.32734/injar.v3i1.4289.
S. K. Ogubazghi and W. Muturi, “The effect of age and educational level of owner/managers on SMMEs’ access to bank loan in Eritrea: Evidence from Asmara City,” American Journal of Industrial and Business Management, vol. 4, no. 11, pp. 632–643, 2014, doi: 10.4236/ajibm.2014.411069.
M. E. Purnawan and M. Taufan, “Characteristics affecting creative business income of leading subsector economies in Java,” JEJAK: Journal of Economics and Policy, vol. 14, no. 1, pp. 21–41, 2021, doi: 10.15294/jejak.v14i1.28717.
B. Hutahayan, “Factors affecting the performance of Indonesian special food SMEs in entrepreneurial orientation in East Java,” Asia Pacific Journal of Innovation and Entrepreneurship, vol. 13, no. 2, pp. 231–246, 2019, doi: 10.1108/APJIE-09-2018-0053.
W. Sajjad, A. Sajjad, and M. Asif, “Impact of entrepreneurial orientation, access to finance and strategic flexibility on SMEs performance,” Journal of Management and Research, vol. 7, no. 1, pp. 1–23, 2020, doi: 10.29145/jmr/71/070101.
N. N. Yuliarmi, N. P. M. Dewi, S. D. Rustariyuni, A. A. I. N. Marhaeni, and G. Andika, “The effects of social capital and human resources on financing and SMEs performance,” International Journal of Human Capital in Urban Management, vol. 6, no. 1, pp. 29–44, 2021, doi: 10.22034/IJHCUM.2021.01.03.
I. Trinugroho, P. Pamungkas, and J. Wiwoho, “Adoption of digital technologies for micro and small business,” Finance Research Letters, Art. no. 102156, 2021, doi: 10.1016/j.frl.2021.102156.
R. Eller, P. Alford, A. Kallmünzer, and M. Peters, “Antecedents, consequences, and challenges of small and medium-sized enterprise digitalization,” Journal of Business Research, vol. 112, pp. 119–127, 2020, doi: 10.1016/j.jbusres.2020.03.004.
S. Gilang, P. Putra, B. Joshi, J. Redi, and A. B. B., “A credit scoring model for SMEs based on social media data,” vol. 2, pp. 113–129, 2020.
G. S. Ahinful, J. D. Boakye, and N. D. Osei Bempah, “Determinants of SMEs’ financial performance: Evidence from an emerging economy,” Journal of Small Business and Entrepreneurship, vol. 35, no. 3, pp. 362–386, 2023, doi: 10.1080/08276331.2021.1885247.
D. Ambarwati et al., “The influence of capital structure, information technology, and business characteristics on SMEs’ performance during the COVID-19 outbreak,” in Proc. 10th Islamic Banking, Accounting and Finance International Conference, 2022, pp. 218–226.
L. Bosman, N. Hartman, and J. Sutherland, “How manufacturing firm characteristics can influence decision making for investing in Industry 4.0 technologies,” 2018, doi: 10.1108/JMTM-09-2018-0283.
H. Zarrouk, M. Sherif, L. Galloway, and T. El Ghak, “Entrepreneurial orientation, access to financial resources and SMEs’ business performance: The case of the United Arab Emirates,” Journal of Asian Finance, Economics and Business, vol. 7, no. 12, pp. 465–474, 2020, doi: 10.13106/JAFEB.2020.VOL7.NO12.465.
DOI: https://doi.org/10.47738/jads.v7i3.1571
Refbacks
- There are currently no refbacks.
Journal of Applied Data Sciences
| ISSN | : | 2723-6471 (Online) |
| Publisher | : | Bright Publisher |
| Website | : | http://bright-journal.org/JADS |
| : | taqwa@amikompurwokerto.ac.id (principal contact) | |
| support@bright-journal.org (technical issues) |
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0