MICROFINANCE INSTITUTIONS AND MSMEs PERFORMANCE IN THE FRAMEWORK OF POVERTY ALLEVIATION (Case Study On Impacted People Around Jatigede Reservoir, Sumedang, West Java)
Sulaeman Rahman Nidar Mokhamad Anwar Layyinaturrobaniyah Yunita Romauli Nababan

Departement of Management and Business
Faculty of Economics and Business
Universitas Padjadjaran, Bandung, Indonesia

Abstract

Abstract

Microcredit is one of the microfinance services of Microfinance Institutions, which is believed to be an effective tool to alleviate poverty through the use of loans by establishing micro, small and medium enterprises. With the existing effort, people are expected to earn income so that they can meet their daily needs and improve their welfare. This study aims to determine the effect of microcredit and the performance of MSMEs on poverty alleviation in affected people around Jatigede Reservoir, Sumedang, West Java. Samples from this research are people affected by Jatigede dam that spread in five Sumedang sub-districts namely Jatigede, Jatinunggal, Wado, Darmaraja and Cisitu which amounts to 100 people. Data collection is done by filling out a questionnaire directly to the community. To see the effect of micro credit and MSMEs performance on poverty alleviation, this study uses PLS SEM analyst with SmartPLS version 3.0 for windows. The results of this study indicate that microcredit and the performance of MSMEs simultaneously affect the level of poverty. Partially, micro credit and MSMEs performance also have a negative and significant impact on poverty level.

Keywords: Microcredit, MSMEs performance, Poverty alleviation, Micro Financial Institution

Topic: Financial Management and Accounting