Search results for: Working Capital Finance

Authors: Rishabh Garg

Abstract:

Traditionally, business parties build trust with a centralized operating mechanism, such as payment by letter of credit. However, the increase in cyber-attacks and malicious hacking has jeopardized business operations and finance practices. Emerging markets, due to their high banking risks and the large presence of digital financing, are looking for technology that enables transparency and traceability of any transaction in trade, finance or supply chain management. Blockchain systems, in the absence of any central authority, enable transactions across the globe with the help of decentralized applications. DApps consist of a front-end, a blockchain back-end, and middleware, that is, the code that connects the two. The front-end can be a sophisticated web app or mobile app, which is used to implement the functions/methods on the smart contract. Web apps can employ technologies such as HTML, CSS, React and Express. In this wake, fintech and blockchain products are popping up in brokerages, digital wallets, exchanges, post-trade clearance, settlement, middleware, infrastructure and base protocols. The present paper provides a technology driven solution, financial inclusion and innovative working paradigm for business and finance.

Keywords: Authentication, blockchain, channel, cryptography, DApps, data portability, Decentralized Public Key Infrastructure, Ethereum, hash function, Hashgraph, Privilege creep, Proof of Work algorithm, revocation, storage variables, Zero Knowledge Proof.

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Authors: Sung-Min Park, Chan Kwon Park, Chae-Bogk Kim

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The purpose of this study is to analyze the relationship between transaction fairness, social capital, supply chain integration and sustainability. Based on the previous studies, measurement items were determined by using SPSS 22 and exploratory factor analysis was performed, and again, using AMOS 21 for confirmatory factor analysis and path analysis was performed by using study items that satisfy reliability, validity, and appropriateness of measurement model. It has shown that transaction fairness has a (+) significant effect on social capital, social capital on supply chain integration, supply chain integration on economic sustainability and social sustainability, and has a (+), but not significant effect on environmental sustainability. It has shown that supply chain integration has been proven to play a role as a parameter between social capital and economic and social sustainability, but not as a parameter between environmental sustainability. Through this study, it is suggested that clearly examining the relationship between fairness of trade, social capital, supply chain integration and sustainability, maintaining fairness of the transaction make formation of social capital, and further integration of supply chain, and achieve sustainability of entire supply chain.

Keywords: Transaction fairness, social capital, supply chain integration, sustainability.

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Authors: Chutikarn Sriwiboon

Abstract:

The main purpose of this research paper was to study the requirements for human capital development in order to be ready for ASEAN Community. Thai education institutions are encountering a challenging course of change to be effective members of ASEAN Economic Community (AEC) in 2015. It was vital that everyone and every organization participate in the process of becoming part of the ASEAN community, a pluralistic society. Thai universities will be required to partake in the human capital development in a variety of fields. In order to assist the whole nation to enhance potential development, there was a need to collaborate with other ASEAN leading universities to do researches to ameliorate the qualifications and capabilities of university management, administers, professors, and staffs.

Keywords: ASEAN, Education, Human capital development.

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Authors: Wim Dierckxsens, Andrés Piqueras

Abstract:

Throughout its history, Capital has established a decisive form of discrimination that has effectively strengthened its power against Labor: discrimination between an endogenous labor force (integrated, with certain guarantees and rights in the capitalist nexus) and an exogenous labor force (yet to be incorporated or incorporated as ‘heterochthonous’, without such guarantees and rights). We refer to the historical incorporation of the exogenous population from the non-capitalist to the capitalist nexus (with the consequent replaceability of the endogenous labor force) as absolute mobility.

The more possibilities Capital has of accessing a population in the non-capitalist nexus and of being able to incorporate it through absolute mobility into the capitalist nexus, the greater its unilaterality or class domination. In contrast, when these possibilities run dry, Capital is more inclined towards reformism or negotiation.

However, this absolute mobility has historically been combined with relative mobility of the labor force, which includes various processes of which labor force migration is a fundamental component.

This paper holds that both types of mobility are at the core of class struggles.

Keywords: Absolute mobility, capital-labor antagonism, relative mobility, substitutability.

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Authors: Hye Rim Lee, Eui Jun Jeong, Joo Woo Kim

Abstract:

This study will examine how the therapeutic factors (therapeutic catharsis-seeking and game-efficacy of the game player) and self-construal factors (independent and interdependent self-construal of the game player) as well as social capital factors (bonding and bridging social capital of the game player) affect aggression in the game. Results show that both therapeutic catharsis-seeking and game self-efficacy are particularly important to the players since they cause the game players’ aggressive tendencies to be greatly diminished. Independent self-construal reduces the level of the players’ aggression. Interestingly enough, the bonding social capital enhances the level of the players’ aggression, while individuals with bridging social capital did not show any significant effects. The results and implications will be discussed herein.

Keywords: Aggression catharsis, therapeutic catharsis seeking, game self-efficacy, self-construal, social capital.

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Authors: Ikaputra

Abstract:

This paper will focus on the concept of social capital for especially housing reconstruction Post Disaster. The context of the study is Indonesia and Yogyakarta Post Earthquake 2006 as a case, but it is expected that the concept can be adopted in general post disaster reconstruction. The discussion will begin by addressing issues on House Reconstruction Post Disaster in Indonesia and Yogyakarta; defining Social Capital as a concept for effective management capacity based on community; Social Capital Post Java Earthquake utilizing Gotong Royong—community mutual self-help, and Approach and Strategy towards Community-based Reconstruction.

Keywords: Community empowerment, Gotong Royong, post disaster, reconstruction, social capital, Yogyakarta-Indonesia.

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Authors: Campisi Domenico, Costa Roberta

Abstract:

Intellectual capital measurement is a central aspect of knowledge management. The measurement and the evaluation of intangible assets play a key role in allowing an effective management of these assets as sources of competitiveness. For these reasons, managers and practitioners need conceptual and analytical tools taking into account the unique characteristics and economic significance of Intellectual Capital. Following this lead, we propose an efficiency and productivity analysis of Intellectual Capital, as a determinant factor of the company competitive advantage. The analysis is carried out by means of Data Envelopment Analysis (DEA) and Malmquist Productivity Index (MPI). These techniques identify Bests Practice companies that have accomplished competitive advantage implementing successful strategies of Intellectual Capital management, and offer to inefficient companies development paths by means of benchmarking. The proposed methodology is employed on the Biotechnology industry in the period 2007-2010.

Keywords: Data Envelopment Analysis, Innovation, Intangible assets, Intellectual Capital, Malmquist Productivity Index.

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Authors: Shoji Katagiri, Hugang Han

Abstract:

This paper clarifies the role of ICT capital in economic growth. Albeit ICT remarkably contributes to economic growth, there are few studies on ICT capital in ICT sector from theoretical point of view. In this paper, production function of ICT which is used as input of intermediate good in final good and ICT sectors is incorporated into our model. In this setting, we analyze the role of ICT on balance growth path and show the possibility of general equilibrium solutions for this model. Through the simulation of the equilibrium solutions, we find that when ICT impacts on economy and economic growth increases, it is necessary that increases of efficiency at ICT sector and of accumulation of non-ICT and ICT capitals occur simultaneously.

Keywords: Endogenous economic growth, ICT, intensity, capital accumulation.

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Authors: Supattra Kanchanopast

Abstract:

The purpose of this paper was to study motivation factors affecting job performance effectiveness. This paper drew upon data collected from an Internal Audit Staffs of Internal Audit Line of Head Office of Krung Thai Public Company Limited. Statistics used included frequency, percentage, mean and standard deviation, t-test, and one-way ANOVA test. The finding revealed that the majority of the respondents were female of 46 years of age and over, married and live together, hold a bachelor degree, with an average monthly income over 70,001 Baht. The majority of respondents had over 15 years of work experience. They generally had high working motivation as well as high job performance effectiveness. The hypotheses testing disclosed that employees with different working status had different level of job performance effectiveness at a 0.01 level of significance. Working motivation factors had an effect on job performance in the same direction with high level. Individual working motivation included working completion, reorganization, working progression, working characteristic, opportunity, responsibility, management policy, supervision, relationship with their superior, relationship with co-worker, working position, working stability, safety, privacy, working conditions, and payment. All of these factors related to job performance effectiveness in the same direction with medium level.

Keywords: Internal Audit Staffs, Job Performance Effectiveness, Working Motivation.

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Authors: Susan.Bandias

Abstract:

This paper examines the role of telecommunications in sustainable development of urban, rural and remote communities in the Northern Territory of Australia through the theoretical lens of Social Capital. Social Capital is a relatively new construct and is rapidly gaining interest among policy makers, politicians and researchers as a means to both describe and understand social and economic development. Increasingly, the concept of Social Capital, as opposed to the traditional economic indicators, is seen as a more accurate measure of well-being. Whilst the essence of Social Capital is quality social relations, the concept intersects with telecommunications and Information Communications Technology (ICT) in a number of ways. The potential of ICT to disseminate information quickly, to reach vast numbers of people simultaneously and to include the previously excluded, is immense. However, the exact nature of the relationship is not clearly defined. This paper examines the nexus between social relations of mutual benefit, telecommunications access and sustainable development. A mixed methodological approach was used to test the hypothesis that No relationship exists between Social Capital and access to telecommunications services and facilities. Four communities, which included two urban, a rural and a remote Indigenous community in the Northern Territory of Australia are the focus of this research paper.

Keywords: Indigenous disadvantage, Social Capital, sustainable development, telecommunications.

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Authors: Korbi Fakhri

Abstract:

In this article, we have elaborated a study over the nature of financial intermediation in Islamic banks by comparison to those of conventional ones. We have found a striking difference between two kinds of intermediation. We tried, from another side, to study the relationship between the capital level and deficiency risk relying on econometric model, and we have obtained a positive and significant relation between the capital and the deficiency risk for the conventional banks. This means that when the capital of these banks increases, the deficiency risk increases as well. In return, since the Islamic banks are constrained to respect the Sharia Committee as well as customers’ demands that may, in certain contracts, choose to invest their capitals in projects they are interested in. These constraints have as effects to reduce the deficiency risk even when the capital increases.

Keywords: Conventional bank, deficiency risk, financial intermediation, Islamic bank.

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Authors: Ivana Tadić, Željana Aljinović Barać, Nikolina Plazonić

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Living today in turbulent business environment forces companies to distinguish from each other, securing sustainable competitive growth and competitive advantage. The best possible solution is to invest (effort and financial resources) within companies’ different practices of human resource management (HRM), more specifically in employees’ knowledge, skills and abilities. Applying this approach companies will create enviable level of human capital securing its economic growth. Employees become human capital for their employers at the moment when they contribute with their own knowledge and abilities in creating material and non-material value of the company. The main aim of this research is to explore the relations between human capital investments and business excellence of Croatian companies. Furthermore, the differences in the level of human capital investments with regard to several companies’ characteristics (e.g. size of the company, ownership and type of the industry) are investigated.

Keywords:

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Authors: Chang Lee Shu-Jung, Mei-Se Chien, Chien-Chiang Lee, Hui-Ting Hu

Abstract:

This paper applies recursive cointegration analysis to examine the dynamic changes in Feldstein-Horioka saving-investment (S-I) coefficients across China and the ASEAN-5 countries over time. To the extent that the S-I coefficients measure international capital mobility, the main empirical results are as follows. The recursive trace statistics show that the investment- savings nexus varies in these six countries. There is no cointegration between investment and savings in three countries (China, Malaysia, and Singapore), which means that the mobility of the capital markets in the three is high and that domestic investment in them will be financed by the global pool of capital. As to the other three countries (Indonesia, Thailand, and Philippines), there is cointegration between investment and savings for part of the sample period in the three, including before 2002 for Thailand, before 2001 for Indonesia, and before 2002 for Philippines. This shows these three countries achieved highly mobile and open capital markets later.

Keywords: Investment, savings, recursive cointegration test, ASEAN, China.

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Authors: Charawee Butbumrung

Abstract:

This paper aimed to study the factors that relate to working behavior of employees at Pakkred Municipality, Nonthaburi Province. A questionnaire was utilized as the tool in collecting information. Descriptive statistics included frequency, percentage, mean and standard deviation. Independent- sample t- test, analysis of variance and Pearson Correlation were also used. The findings of this research revealed that the majority of the respondents were female, between 25- 35 years old, married, with a Bachelor degree. The average monthly salary of respondents was between 8,001- 12,000 Baht, and having about 4-7 years of working experience. Regarding the overall working motivation factors, the findings showed that interrelationship, respect, and acceptance were ranked as highly important factors, whereas motivation, remunerations & welfare, career growth, and working conditions were ranked as moderately important factors. Also, overall working behavior was ranked as high. The hypotheses testing revealed that different genders had a different working behavior and had a different way of working as a team, which was significant at the 0.05 confidence level, Moreover, there was a difference among employees with different monthly salary in working behavior, problem- solving and decision making, which all were significant at the 0.05 confidence level. Employees with different years of working experience were found to have work working behavior both individual and as a team at the statistical significance level of 0.01 and 0.05. The result of testing the relationship between motivation in overall working revealed that interrelationship, respect and acceptance from others, career growth, and working conditions related to working behavior at a moderate level, while motivation in performing duties and remunerations and welfares related to working behavior towards the same direction at a low level, with a statistical significance of 0.01.

Keywords: Employees of Pakkred Municipality, Factors, Nonthaburi Province, Working Behavior.

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Authors: K. Zigan

Abstract:

Not with standing the importance of foreign highly skilled professionals for host economies, there is a paucity of research studies investigating the role of the corporate social context during the integration process. This research aims to address this paucity by exploring the role of social capital in the integration of foreign health professionals. It does so by using a qualitative research approach. In this pilot study the hospital sector forms this study-s sample and interviews were conducted with HR managers, foreign health professionals and external HR consultants. It was found that most of the participating hospitals had not established specific HR practices and had only partly linked the development of organisational social capital with a successful integration process. This research contributes, for example, to the HR literature on the integration of self-initiated expatriates by analysing the role of HRM in generating organisational social capital needed for a successful integration process.

Keywords: Corporate integration, hospitals, self-initiated expatriates, organisational social capital.

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Authors: Denis Câprâroiu

Abstract:

The city of Suceava, one of the most important medieval capital of Moldova, owes its urban genesis to the power center established in its territory at the turn of the thirteenth and fourteenth centuries. Freed from the effective control exercised by the Emir Nogai through Alanians, the local center of power evolved as the main representative of the interests of indigenous people in relation to the Hungarian Angevin dinasty and to their representatives from Maramures. From this perspective, the political and military role of the settlement of Suceava was archeologically proved by the discovery of extensive fortifications, unrivaled in the first half of the XIVth century-s Moldavia. At the end of that century, voivod Peter I decides to move the capital of the state from Siret to Suceava. That option stimulated the development of the settlement on specific urban coordinates.

Keywords: Moldova, Suceava, voivod, capital.

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Authors: Kati Skarp, Keijo Varis, Juha Kettunen

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The purpose of this paper is to examine and evaluate the top-down and bottom-up leadership development programs focused on human capital that improve the performance of a company. This study reports on the external top-down leadership development program supported by a consulting company and the internal participatory action research of the bottom-up program. The sickness rate and the lost time incident failure rate decreased and the ideas produced for cost savings improved, leading to increased earnings during the top-down program. The estimated cost savings potential of the bottom-up program was 3.8 million euro based on the cost savings of meeting habits, maintenance practices and the way of working in production. The results of this study are useful for those who plan and evaluate leadership development and human capital productivity consultation programs to improve the performance of a company.

Keywords: Leadership, development, human resources, company, indicators, evaluation.

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Authors: Chimaobi Valentine Okolo

Abstract:

This paper seeks to assess the implications of bank consolidation on lending, which largely determine the survival and performance of small and medium scale enterprises and in turn the development of the Nigerian economy. Ordinary least square technique, correlation matrix test and Granger –causality test were employed to measure the extent to which lending to small and medium scale enterprises were influenced. The result showed that bank deposit (BD) impacted on lending to small and medium scale enterprises. Commercial and merchant bank lending rate had statistically insignificant effect on the dependent variable. There is a shift of focus by commercial banks from small and medium scale enterprises (small customers) to major investors (big customers). While micro finance banks work hard at providing funds to small and medium scale entrepreneurs, their capacity to meet the needs of these entrepreneurs is constrained. The capital and deposits of micro finance bank should be boosted in order to effectively support small and medium scale enterprises through loans.

Keywords: Asset size, bank consolidation, lending, small and medium enterprises.

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Authors: Maria E. Eggink

Abstract:

Innovation plays an important role in economic growth and development. Evolutionary economics has entrepreneurs at the centre of the innovation system, but includes all other participants as contributors to the performance of the innovation system. Education and training institutions, one of the participants in the innovation system, contributes in different ways to human capital. The gap in literature on the competence building as part of human capital in the analysis of innovation systems is addressed in this paper. The Mpumalanga Province of South Africa is used as a case study. It was found that the absence of a university, the level of education, the quality and performance in the education sector and the condition of the education infrastructure have not been conducive to learning.

Keywords: Education institutions, human capital, innovation systems, Mpumalanga Province.

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Authors: Vinko Vidučić, Ljiljana Vidučić, Damir Boras

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The goals of the research include the determination of the characteristics of SMEs finance in Croatia, as well as the determination of indirect growth rates of the information model of the entrepreneurs` perception of business environment. The research results show that cost of finance and access to finance are most important constraining factor in setting up and running the business of small entrepreneurs in Croatia. Furthermore, small entrepreneurs in Croatia are significantly dissatisfied with the administrative barriers although relatively to a lesser extent than was the case in the pre crisis time. High collateral requirement represents the main characteristic of bank lending concerning SMEs followed by long credit elaboration process. Formulated information model has defined the individual impact of indirect growth rates of the remaining variables on the model’s specific variable.

Keywords: Business environment, information model, indirect growth rates, SME finance.

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Authors: George Yungchih Wang

Abstract:

Real options theory suggests that managerial flexibility embedded within irreversible investments can account for a significant value in project valuation. Although the argument has become the dominant focus of capital investment theory over decades, yet recent survey literature in capital budgeting indicates that corporate practitioners still do not explicitly apply real options in investment decisions. In this paper, we explore how real options decision criteria can be transformed into equivalent capital budgeting criteria under the consideration of uncertainty, assuming that underlying stochastic process follows a geometric Brownian motion (GBM), a mixed diffusion-jump (MX), or a mean-reverting process (MR). These equivalent valuation techniques can be readily decomposed into conventional investment rules and “option impacts", the latter of which describe the impacts on optimal investment rules with the option value considered. Based on numerical analysis and Monte Carlo simulation, three major findings are derived. First, it is shown that real options could be successfully integrated into the mindset of conventional capital budgeting. Second, the inclusion of option impacts tends to delay investment. It is indicated that the delay effect is the most significant under a GBM process and the least significant under a MR process. Third, it is optimal to adopt the new capital budgeting criteria in investment decision-making and adopting a suboptimal investment rule without considering real options could lead to a substantial loss in value.

Keywords: real options, capital budgeting, geometric Brownianmotion, mixed diffusion-jump, mean-reverting process

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Authors: I Putu Eka N. Kencana, I Wayan Mertha

Abstract:

As an entity of the tourism system, local communities were considered have better understanding of their region as well as influenced positively or negatively by the tourism activities in the region. This paper aimed to study role of community involvement in the development of ecotourism at Kintamani Bali from two perspectives of view, i.e. participation in the process of initiatives and participation in the utilizing the economic benefits of tourism. Thorough participation as an antecedent of social capital form, the sustainability of ecotourism at Kintamani could be expected.

Keywords: Community involvement, ecotourism, participation, social capital.

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Authors: Hyeondal Jeong, Yoonjung Baek

Abstract:

This research examines the effects of positive psychological capital (or PsyCap) on employee’s outcomes (satisfaction, commitment, organizational citizenship behavior, innovation behavior and individual creativity). This study conducted a meta-analysis of articles published in the Republic of Korea. As a result, positive psychological capital has a positive effect on the behavior of employees. Heterogeneity was identified among the studies included in the analysis and the context factors were analyzed; the study proposes contextual factors such as team tenure. The moderating effect of team tenure was not statistically significant. The implications were discussed based on the analysis results.

Keywords: Positive psychological capital, satisfaction, commitment, OCB, creativity, meta-analysis.

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Authors: Paitoon Kraipornsak

Abstract:

Government spending is categorized into consumption spending and capital spending. Three categories of private consumption are used: food consumption, nonfood consumption, and services consumption. The estimated model indicates substitution effects of government consumption spending on budget shares of private nonfood consumption and of government capital spending on budget share of private food consumption. However, the results do not indicate whether the negative effects of changes in the budget shares of the nonfood and the food consumption equates to reduce total private consumption. The concept of aggregate demand comprising consumption, investment, government spending (consumption spending and capital spending), export, and import are used to estimate their relationship by using the Vector Error Correction Mechanism. The study found no effect of government capital spending on either the private consumption or the growth of GDP while the government consumption spending has negative effect on the growth of GDP.

Keywords: Complementary effect, government capital spending, government consumption spending, private consumption on food, nonfood, and services, substitution effect, vector error correction mechanism.

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Authors: Simon Huston, Ebraheim Lahbash, Ali Parsa

Abstract:

The development of the United Arab Emirates (UAE) into a regional trade, tourism, finance and logistics hub has transformed its real estate markets. However, speculative activity and price volatility remain concerns. UAE residential market values (MV) are exposed to fluctuations in capital flows and migration which, in turn, are affected by geopolitical uncertainty, oil price volatility and global investment market sentiment. Internally, a complex interplay between administrative boundaries, land tenure, building quality and evolving location characteristics fragments UAE residential property markets. In short, the UAE Residential Valuation System (UAE-RVS) confronts multiple challenges to collect, filter and analyze relevant information in complex and dynamic spatial and capital markets. A robust (RVS) can mitigate the risk of unhelpful volatility, speculative excess or investment mistakes. The research outlines the institutional, ontological, dynamic and epistemological issues at play. We highlight the importance of system capabilities, valuation standard salience and stakeholders trust.

Keywords: Valuation, property rights, information, institutions, trust, salience.

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Authors: Qiong Huang, Satish Chand

Abstract:

This paper uses a primary data from 670 Chinese manufacturing firms, together with the newly introduced regressionbased inequality decomposition method, to study the effect of openness on wage inequality. We find that openness leads to a positive industry wage premium, but its contribution to firm-level wage inequality is relatively small, only 4.69%. The major contributor to wage inequality is human capital, which could explain 14.3% of wage inequality across sample firms.  

Keywords: Openness, human capital, wage inequality, decomposition; China.

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Authors: Lars Silver, Björn Berggren, Andreas Fili

Abstract:

The financial crisis has decreased the opportunities of small businesses to acquire financing through conventional financial actors, such as commercial banks. This credit constraint is partly the reason for the emergence of new alternatives of financing, in addition to the spreading opportunities for communication and secure financial transfer through Internet. One of the most interesting venues for finance is termed “crowdfunding". As the term suggests crowdfunding is an appeal to prospective customers and investors to form a crowd that will finance projects that otherwise would find it hard to generate support through the most common financial actors. Crowdfunding is in this paper divided into different models; the threshold model, the microfinance model, the micro loan model and the equity model. All these models add to the financial possibilities of emerging entrepreneurs.

Keywords: Entrepreneurship, crowdfunding, equity finance, bank finance.

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Authors: H. Florianová, J. Nešleha

Abstract:

Financial derivatives are considered to be risky investment instruments which could possibly bring another financial crisis. As prevention, European Union and its member states have released new legal acts adjusting this area of law in recent years. There have been several cases in history of capital markets worldwide where it was shown that legislature may affect behavior of subjects on capital markets. In our paper we analyze main events on selected European stock exchanges in order to apply them on three chosen markets - Czech capital market represented by Prague Stock Exchange, German capital market represented by Deutsche Börse and Polish capital market represented by Warsaw Stock Exchange. We follow time series of development of the sum of listed derivatives on these three stock exchanges in order to evaluate popularity of those exchanges. Afterwards we compare newly listed derivatives in relation to the speed of development of these exchanges. We also make a comparison between trends in derivatives and shares development. We explain how a legal regulation may affect situation on capital markets. If the regulation is too strict, potential investors or traders are not willing to undertake it and move to other markets. On the other hand, if the regulation is too vague, trading scandals occur and the market is not reliable from the prospect of potential investors or issuers. We see that making the regulation stricter usually discourages subjects to stay on the market immediately although making the regulation vaguer to interest more subjects is usually much slower process.

Keywords: Capital markets, financial derivatives, investors' behavior, regulation.

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Authors: Okolo Chimaobi Valentine

Abstract:

This paper seeks to assess the implications of bank consolidation on the performance of small and medium scale enterprises in the Nigerian economy. Multiple linear regression technique and correlation matrix test were employed to measure the extent to which small and medium scale enterprises asset size, survival and access to credit were influenced. The result showed that bank deposit (BD) and bank credit (L or BC) impacted on asset size and survival of small and medium scale enterprises. None of the variables had significant impact on SMEs access to credit. There is a shift of focus by commercial banks away from small and medium scale enterprises (small customers), which is evidenced by the significant negative influence of bank credit to both the survival and asset size of small and medium enterprises. While micro finance banks work hard at providing funds to small and medium scale entrepreneurs, their capacity to meet the needs of these entrepreneurs is constrained. CBN should make policies that will boost micro finance bank’s capital and also monitor closely the management of the banks to ensure prudent financing of small and medium scale investments.

Keywords: Bank consolidation, small and medium enterprises.

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Authors: N. Ikasari, T. Sumransat, U. Eko, R. Kusumastuti

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Small and medium enterprises (SMEs) are regarded as the engine for economic development, notwithstanding their continuous financing conundrum. In the case of developing countries, access to finance is a reflection of the effectiveness of government policy. The widely accepted perspective to assess small businesses’ access to finance is that of economic view. The existing body of literature presents access to finance in three dimensions; they are accessibility, eligibility and affordability. Within this perspective, the role of socio-cultural has not explored. This study is aimed at investigating the existence of any socio-cultural factors within access to finance issue in Asian countries where governance is enriched by countries’ values and beliefs. The significance of this study is the instigation of supplementary dimension to assess access to finance that eventually contributes to the development of micro-finance policy. Indonesia and Thailand are selected as cases in point, where distinction is drawn on the level of cultural diversity and micro-finance policy in respective country. A questionnaire is used to collect information related to the three dimensions of access to finance as well as to explore alternative financing reasoning to elaborate the issue from the demand side. Questionnaires are distributed to 60 small business owners operating in Indonesia and the same number in Thailand. In order to present a complete understanding on the matter at hand, interviews with banks are conducted to capture the perspective as presented by the supply side. Research findings show that small business owners and banks in Indonesia and Thailand are in agreement that access to finance is not deemed as an issue. However, trust issue that exists mutually between financing users and providers leads small business owners in Indonesia to look for alternative financing other than banks. The findings contribute to the refinement of micro-financing policy in Indonesia and Thailand.

Keywords: Access to finance, Indonesia, small and medium enterprises, Thailand.

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