Financial factors contribution to SMEs’ profitability

Aisyah, Esy Nur and Umami, Ana Khabibatul (2022) Financial factors contribution to SMEs’ profitability. Journal of Business & Banking, 12 (1). pp. 19-33. ISSN 2303-3460

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Abstract

Micro, small, and medium enterprises play a very important role in driving the economy
both nationally and internationally. The level of profitability is one indicator of the
performance of SMEs. One of the factors that affect profitability is the financial factor.
Therefore, this study attempts to analyze the contribution of financial factors (Own
Capital, Loan Capital, Assets, Trade Credit, Production Costs, Sales, Average Wages,
Taxes, and Lagged Profitability) to the profitability of SMEs. The population consists of
all SMEs in the city of Malang. The sampling technique used an iteration formula and
obtained a sample of 116 SMEs in Malang that received financing from Islamic financial
institutions, banks, and non-banks. Questionnaires and observational interviews collected data. The data analysis technique used Multiple Linear Regression. The result of
the determination test on this research model is 0.839 (84%). And based on the results
of the partial test, of the nine independent variables in the study, only three variables
have a significant positive effect on the profitability of SMEs, namely Own Capital, Loan
Capital, and Lagged Profitability. And of the three variables that provide the largest
contribution or influence on profitability is Own Capital.

Item Type: Journal Article
Keywords: Financing, Sharia Microfinance Institutions, Small Medium Enterprises
Subjects: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment
Divisions: Faculty of Economics > Department of Islamic Banking
Depositing User: Esy Nur Aisyah
Date Deposited: 14 Mar 2023 11:35

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