SMALL, MEDIUM, MICRO ENTERPRISES, AND FINANCIAL GROWTH CYCLE
Abstract: Research on small,
medium, and micro-sized enterprises (SMMEs) is considered interesting.This
study attempts to examine the existence of external financing on micro, small
and mediumenterprises in Jogjakarta, especially to support the existence of The
Financial GrowthCycle Model proposed by Bergel and Udell (1998). This model
argues that, as the enterprisesgetting mature in terms of age, size and
published information, the external financings aregradually employed. Besides
that, this study also examines the policy implication regardingthe existence of
Financial Growth Cycle Model. Using multinomial logistics regression, 100of
micro, small, and medium sized-enterprises in Jogjakarta are analyzed. The
result showsthat micro, small and medium-sized enterprises in Jogjakarta have a
high tendency to useinternal financings rather than external ones. This
evidence is due to the major characteristicsof the sample, which they are
considered under developed or immature. Moreover, theresults suggest that the
Financial Growth Cycle Model is supported. The result also suggeststhat
microfinance institution should follow three strategies to provide source of
capital.Those strategies are market segmentation, loan portfolio, and assisting
program for SMMEs.
Author: Elok Pakaryaningsih
Journal Code: jpakuntansigg100039
