Artikel 7 99 112 jurnal indonesia unila

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* Corresponding Author

P-ISSN: 2087-0825, E-ISSN: 2548-6977 DOI: 10.23960/administratio.v14i1.336 Accredited by Kemenristek Number 85/M/KP/2020 (Sinta 4)

ARTICLE

Mediation and Facilitation of The Poor Society Financing Access to Microfinance Institutions

Arief Rachman^1*, Ari Juliana²

1,2 Universitas Terbuka

How to cite: Rachman, A., Juliana, A (2023) Mediation And Facilitation Of The Poor Society Financing Access To Microfinance Institutions. Administratio: Jurnal Ilmiah Administrasi Publik dan

Pembangunan, 14(1) Article History

Received: 7 November 2022

Accepted: 24 April 2023 Keywords:

Accessibility;

Empowerment;

Microfinance; Financing

Kata Kunci:

Aksesibilitas;

Pemberdayaan; Keuangan Mikro; Pembiayaan

ABSTRACT

Microfinance offers loans to the poor with the aim of improving their living standards. Empowerment of microfinance becomes important and strategic through the formulation of policies and programs that are right on target.

However, in its development there are still problems faced, especially the difficulty of accessing capital and financing. This study aims to examine how perceived benefits mediate the effect of microfinance accessibility on the utilization of microfinance. This study utilized a quantitative approach by using a structured questionnaire developed for the purpose in consultation with experts in the field.

Survey was conducted in 2021 of 629 microfinances at Banten Province, Indonesia.

Moderated regression analysis was used in data analysis. The result shows that the impact of microfinance accessibility on increasing the utilization of microfinance when the perceived benefit is maximized. This study recommends other constructs such as financial literacy, community, and population density as factors which driving microfinance growth. The results can be a reference for policy makers to further improvement of the existing policy framework and provide more opportunities for microfinance to improve its service strategy to the community.

ABSTRAK

Keuangan mikro menawarkan pinjaman kepada masyarakat miskin dengan tujuan untuk meningkatkan taraf hidup mereka. Pemberdayaan keuangan mikro menjadi penting dan strategis melalui perumusan kebijakan dan program yang tepat sasaran.

Namun, dalam perkembangannya masih terdapat permasalahan yang dihadapi, terutama sulitnya akses permodalan dan pembiayaan. Penelitian ini bertujuan untuk menguji bagaimana persepsi manfaat memediasi pengaruh aksesibilitas keuangan mikro terhadap pemanfaatan keuangan mikro. Penelitian ini menggunakan pendekatan kuantitatif dengan menggunakan kuesioner terstruktur yang dikembangkan untuk tujuan tersebut melalui konsultasi dengan para ahli di bidangnya. Survei dilakukan pada tahun 2021 terhadap 629 keuangan mikro di Provinsi Banten, Indonesia. Analisis regresi moderasi digunakan dalam analisis data. Hasil penelitian menunjukkan bahwa aksesibilitas keuangan mikro berdampak pada peningkatan pemanfaatan keuangan mikro ketika manfaat yang dirasakan dimaksimalkan. Penelitian ini merekomendasikan konstruk lain seperti literasi keuangan, komunitas, dan kepadatan penduduk sebagai faktor pendorong pertumbuhan keuangan mikro. Hasil penelitian ini dapat menjadi referensi bagi

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100 | Administratio, Vol. 14 (1 ) 2023: 99-112

pembuat kebijakan untuk memperbaiki kerangka kebijakan yang ada dan memberikan lebih banyak kesempatan bagi keuangan mikro untuk meningkatkan strategi pelayanannya kepada masyarakat

A. INTRODUCTION

Banten Province, Indonesia is no exception facing the challenges of utilization of microfinance. The growth pattern of microfinance in Banten Province continues to increase significantly from time to time. However, even though the quantity is quite large, microfinance remains stagnant. The microfinance structure encourages the government to create programs to support growth and expansion. In 2020, the number of microfinances in Banten Province is 5,589 units. There are 4,316 active microfinance units and 1,273 inactive microfinance units (BPS, 2021). The business volume of all Cooperatives in Banten Province is Rp. 2,978,867,710,724.

These cooperatives make a real contribution in improving the regional and even national economy, especially in providing capital and/or financing for micro and small business actors and even a small number of medium businesses.

Referring to the good performance of cooperatives and their very real contribution in improving the economy in Banten Province, the empowerment of cooperatives is important and strategic and needs to be carried out through Total Cooperative Reform policies and programs, namely: Reorientation, Rehabilitation and Cooperative Development.

The first reforms are: Reorientation of cooperatives, which orients the empowerment of cooperatives on the quality, not only on the quantity of cooperatives, so that cooperatives begin to move their business towards higher quality cooperatives. The second reform, Cooperative Rehabilitation, begins with collecting data on cooperatives through the Online Data System (ODS) as a basis for reforming cooperatives. The cooperative data base is expected to show the real conditions of active cooperatives, inactive cooperative and newly established cooperatives. Rehabilitation is a step to renew cooperatives by freezing and/or dissolving cooperatives that are not active. This includes controlling cooperatives through integrated supervision by establishing a Cooperative Supervision (Task Force) at the Provincial and Regency or City levels throughout Indonesia. Finally, the third reform, namely: Development of cooperatives, namely in terms of how all policies and programs carried out by the government must be focused on developing cooperatives. The government must expand and facilitate the development of access to capital and financing for cooperatives by establishing non-banking financial institutions.

In the Indonesian context, cooperatives are one of the many economic institutions, the progress of which is growing quite rapidly in Indonesia. The existence of cooperatives has played a major role in development as a people-based economic movement that can unite the community. The legality of its existence in Indonesia is guaranteed through Article 33 of the 1945 Constitution paragraphs (1) and (2), and Law Number 25 of 1992 concerning cooperatives. In Article 33 paragraph 1 of the 1945 Constitution it is explained that the economy is structured as a joint effort based on the principle of kinship, this is in line with Article 1 of Law Number 25 of 1992 which explains that a cooperative is a business entity consisting of one person or a cooperative legal entity by basing its activities on the basis of cooperative principle as well as a people's economic movement based on the principle of kinship.

The role and function of cooperative is very much in accordance with Law Number 25 of 1992 concerning Cooperatives and in accordance with Law Number 11 of 2020 concerning

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Administratio, Vol. 14 (1) 2023: 99-112 | 101 Job Creation, which is to build and develop the potential and economic capabilities especially for its member and the wider community in general. To improve economic and social welfare, actively participate in efforts to improve the quality of human life and community members, strengthen the people's economic basis as the foundation of the nation's economic strength and resilience with cooperatives as the pillars of the teacher, and strive to realize and develop the national economy which is a joint effort based on the principles of kinship and economic democracy.

In the economic field, the role of cooperative-based Microfinance Institutions is very much felt in national development because cooperatives have many roles in helping to increase sources of income and prosperity, especially for their members and the community in general, helping to improve business capabilities, helping the financing of the poor who have had difficulty getting access to financing to official banking and non-banking institutions, and assisting the government in eradicating moneylenders (rentenir). In addition, it also participates in helping business development both individually and in society at large, assisting the government in preparing employment opportunities, organizing economic life in a democratic manner, assisting in developing the economic potential of cooperative members and society in general, and strengthening the people's economy as a foundation. strength of the national economy.

Local governments such as Banten Provincial Government have initiated several financing programs to support microfinance capital needs. A substantial government program to assist microfinance through microfinance and small business programs. The government allocates funds to support capital needs, including microfinance.

This policy aims to support microfinance institution in increasing its capacity. However, over time, funding only helps in the short term, but does not sustain in the long term (Othman and Ameer, 2015).

Some of the efforts that can be made to improve the living standards of the poor are access to financial services. However, for formal financial institutions, serving credit to the poor in rural areas in various cases is a high-cost activity because banks are less interested in serving the poor segment of society (Lensink, Meesters, 2014). The same thing happens in Indonesia, Low-Income Communities and micro-enterprises as well as those living in rural areas are not served by Commercial Banks (Siregar, 2009). Due to the difficulty of obtaining credit services, the poor are trapped in a cycle of poverty. They are poor due to low income, which in turn hinders investment due to low savings rates due to low income. Banking credit provides opportunities for the poor to invest in an effort to break the cycle of poverty (Hulme, 1996).

In order to facilitate Low-Income Communities who do not have access to banking, many microfinance institutions have been established in Indonesia, especially cooperatives. It has been specifically stated by several experts that Micro Finance Institutions are the main providers of financial services for the poor and micro-scale enterprises (Morduch, 1998;

Miyashita, 2000; Godquin, 2004; Aubert, 2009; Todaro and Smith, 2009; Mersland and Strom, 2010; Islam and Maitra 2011; Montgomery and Weiss, 2011; El-Komi & Croson, 2012; Hundak, 2012; Ali et al, 2014). In Indonesia, among the many Micro Finance Institutions (MFI) that have been established, one of them is a Micro Finance Institution known as the Sharia Savings and Loans Cooperative.

The outreach of MFI services is mainly aimed at micro-enterprises and/or poor households. In terms of funding sources, most of the MFI sources of capital come from the mobilization of public funds, which is approximately 67%, in the other hand, only 2% of funds come from the government. This is different from the first generation of Micro Finance

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Institutions, where most of the funds for financing came from donor agencies or the government.

On the other hand, the environmental characteristics of Microfinance Institutions are characterized by high operating costs of the institution. This problem has consequences on the inability to make profits and if profits are obtained, the margins are relatively low compared to formal financial institutions in the same segment (Adongo and Stork, 2005).

Hermes et al. (2015) stated that providing credit to the poor in many cases is a very high- cost activity. Capital loans with a very small value will cause high transaction costs, especially in the screening, monitoring and evaluation process and administrative costs per debtor. Several experts, namely Connig, Hulme, Mosley, Lapenu, Zeller, Paxton and Cuevas in Lensink and Meesters (2011) stated that the cost per unit transaction for very small loans for the poor is high when compared to the unit costs for large loans. Therefore, it is important for MFI to optimize existing resources to minimize costs, so that the MFI operations are efficient. The demand for efficiency, the necessity to mobilize funds from the community or from other commercial sources, directs MFI to operate according to market principles or known as MFI commercialization (Charitonenko et al., 2004). Several research results (Conning, 1999; Kereta, 2007; Hermes et al, 2011; Nugroho, 2009; Acharya et al, 2006;

Ghalib, 2011; Montgomery & Weiss, 2011; Hartarska et al, 2013) show a trade-off between sustainability of the MFI with its service coverage for the poor. The existence of this conflict has implications for a shift in focus to improve sustainability, which requires a reduction in outreach to the poor. Until now, the topic of the trade-off between sustainability and efficiency with outreach is still a debate, especially between welfarists who tend to propagate the dominance of outreach goals, and institutionalists, who emphasize the importance of sustainability and efficiency (Hermes et al. al, 2011).

A similar controversy also occurs in MFI. The trade-off between MFI sustainability and outreach to the poor has often been questioned since the 1990s (Conning, 1999; Zeller &

Meyer, 2002). The formulation of the right policy strategy is urgently needed, given the high poverty rate in Indonesia, especially in rural areas. On the other hand, the government must encourage Micro Finance Institutions to be sustainable.

This study aims to examine the mediating effect of perceived benefit on the effect of microfinance accessibility on the utilization of microfinance.

This study carried out two stages of analysis. Descriptive analysis describes descriptive research variables, while inferential analysis is to examine the effect of microfinance accessibility on the utilization of microfinance mediated by perceived benefits. Research results can help assess microfinance growth. This study contributes to the literature: first, the results will contribute to policy makers to improve the existing policy framework. Second, encouraging phenomenological research can help find ways to overcome stagnation in Micro Finance Institution.

Empirical Background

Human Resources (HR) are very influential on the development of a region. The readiness of qualified human resources is needed to fulfill the competencies needed for the business world. Banten Province is well known as an Islamic religious area. This is also supported by the vision of Banten Province where faith and piety (iman dan taqwa) are used as the foundation of development. In order to create an investment climate that can absorb a lot of labor and strengthen the economy. So the Banten Provincial Government always supports the activities of Cooperatives and SMEs (Small Medium Enterprise). The existence of Cooperatives and SMEs in Banten, in addition to helping to increase people's economic income, can also be a source of income for local governments through Regional Original Income (Pendapatan Asli Daerah/PAD) in the form of taxes and levies/ retribution.

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Administratio, Vol. 14 (1) 2023: 99-112 | 103 Labor absorption is the impact of investment activities both Foreign Investment and Domestic Investment (PMA and PMDN) which continue to grow and develop in Banten Province. The Regional Government is very open and fully supports the investment activities of Cooperatives and SMEs in Banten.

For this reason, Cooperatives and SME as government investment partners must obtain legal certainty and protection of their business activities. Because basically, investment activities should be able to create mutually beneficial synergies between the cooperative movement and small, medium and large business actors. The government's task is to carry out facilitation, guidance and development of Cooperatives and SME through partnership and environmental development programs, Corporate Social Responsibility (CSR), financing and/or capital for Cooperatives and SMEs, increasing the competitiveness of Cooperatives and SME, encouraging innovation and expanding market segments, and disseminating information as widely as possible.

As for the factors that hinder the movement of cooperatives and SME actors to obtain financing (capital) from financial institutions, are the weakness of business legality and collateral (collateral). Difficulty fulfilling banking requirements, high loan interest rates.

Nevertheless, the Regional Government through the Banten Provincial Government has made strong efforts to encourage the movement of Cooperatives and SMEs by establishing a Credit Guarantee Company in Banten Province, namely PT Jamkrida Banten (PT. Penjaminan Kredit Banten), on September 11, 2013, based on Regional Regulation Number 3 of 2013 (Perda No. 3 Tahun 2013) )concerning Establishment of PT. Jamkrida Banten, whose purpose is to guarantee credit extended by financial institutions, both banking and non- banking to Cooperatives and MSME (Micro, Small and Medium Enterprise) in Banten Province.

The government has realized that building the potential of regional superior business/products will have an impact on job creation and minimize social inequality. As for the Bank itself, it will have an impact on increasing income, increasing the circulation of money, and as part of efforts to mitigate business risk. For Cooperatives and MSME, the benefits are to provide easy access to financing from banks and non-banks, to increase MSME capacity with additional working capital credit (Kredit Modal Kerja/KMK) or investment, and to increase the number of Cooperatives and MSMEs in conducting business in various economic sectors.

Based on the Empirical Viewpoint, it shows that the real problem of cooperatives is not in the quantity (number) of cooperatives themselves, because from year to year cooperatives grow everywhere, especially in coastal and rural areas which focus more on quality (quality).

Cooperatives as a forum to encourage the economic development of residents around the coastal and rural areas in a sustainable manner, and their existence ideally can be an asset for communities around the coast/coastal and rural areas in order to improve their living standards economically. However, the existence of cooperatives in Banten Province has not been able to fully improve the welfare of its members and the wider Banten community. In fact, assistance and policies have been provided to Cooperatives and MSME, and it cannot be denied that the development of cooperatives is quite rapid nationally, especially in Banten Province. However, in its development there are still problems/problems faced by Cooperatives and MSME, especially the sources of financing/capital for cooperatives located in coastal and rural areas that are far from official financial institutions, both banks and non- banks. Economic empowerment of coastal and rural communities (fishermen/or farmers) through strengthening cooperative institutions is the right and strategic and relevant solution.

Coastal and rural communities are very difficult to develop due to weak market power,

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income uncertainty, especially during unfavorable (bad) weather conditions, cooperative institutions that are still very weak, including the need for financing/capital.

According to the Performance Data at the Cooperatives and SME Office Banten Province in 2021 it is noted that in quantity (number) of cooperatives that are not healthy and inactive are increasing. The increasing number of inactive cooperatives and the declining performance of cooperatives are caused by several external factors, among other are: First, there is competition with banks, BPR/BPRS, Leasing, Multi Finance, Venture Capital Companies, Pawnshops and/or other financial institutions. Second, the lack of grounding in the spirit of carrying out economic life through cooperatives, what happens is that residents are asked to join as members of cooperatives because there is the lure of government assistance. Cooperatives are proposed through external projects or agendas. Third, the capacity and competence of the management who have not been able to manage the complexity of the members, do not understand financial and management governance. This means that it is difficult for administrators and managers to adapt to external changes that are increasingly advanced in the era of the industrial revolution 4.0 towards the era of Society 5.0. They all have a vision but are not aware that they do not have the capacity and ability to make it happen. Meanwhile, the government, which is expected to be a helper, has actually plunged into systemic dependence and a dependency that is engineered as a project or assistance based on the Regional Revenue and Expenditure Budget and/or the National Revenue and Expenditure Budget (APBD/APBN), which in the end, the estuary is the empowerment of quasi-base in projects. If the project funded by the APBD or APBN is completed and no longer budgeted for the following year, the activities will also be closed.

On the other hand, it is undeniable that the development of cooperatives is quite fast in the provinces on the island of Java, including in the province of Banten. However, in its development there are still a few problems faced, especially from the institutional aspect of cooperatives located in coastal areas and/or remote rural areas, due to limited access to information, market access, availability of human resources, access to capital and/or financing, business innovation and ineffective institutional arrangements.

So great is the strength and existence of cooperatives, ideally cooperatives can become one of the great assets for the community, especially rural communities in an effort to improve their standard of living economically. However, the existence of cooperatives in Banten Province is not yet optimally able to improve the welfare of members and the community as a whole. For this reason, cooperatives in areas/rural areas and even urban areas must receive special attention regarding their existence in carrying out their operational activities, their financing and/or capital and the Human Resources (HR) in them and their institutional arrangements.

The differences between cooperatives and other financial institutions (banking or non- banking) are:

1. Cooperatives will grow in areas where the economy has not yet grown, because the correct cooperatives based on cooperative principles are those that serve members of Low-Income Communities (LIC) who are mostly on the coast or in rural areas.

2. A true cooperative based on the principles and identity of a cooperative is one that not only provides financing loans, but also conducts continuous development on an ongoing basis to its members until they are independent in their business.

3. Banking and non-banking financial institutions other than cooperatives will grow in areas that have grown and have a lot of circulation of money. This means that Bank and Non-Bank institutions will only open services in areas where the velocity of money is already high. Non-cooperative institutions will not open services to the community if there is no good economic activity in the area, including not opening services in slum coastal areas and/or in rural areas. It is in this area that the cooperative should operate.

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Administratio, Vol. 14 (1) 2023: 99-112 | 105 In improving the people's economy, the role and function of cooperatives is very vital. It is impossible for the founders of this nation (the founding fathers) to include the sacred sentence "Soko Guru Ekonomi Rakyat (Soko Guru of People's Economy)” is a cooperative in the constitution (UUD 45) of the State of Indonesia if indeed cooperatives are not compatible with our nation's economic system of mutual cooperation. The founding fathers of the nation had the aspiration that our economic system, the State of Indonesia, was based on family principles as mandated by Article 33 of the 1945 Constitution, not a liberal economy or capitalism or even socialism. However, if we look at the economic development of Indonesia over the past 70 years, the performance of cooperatives seems to be far behind with the liberal and capitalistic economic system, because if we trace it turns out that the existing economic and political conditions seem less conducive to the development of cooperatives.

Internally, it can be traced that there are 5 (five) aspects of the weakness of cooperatives so that they have not developed significantly in Indonesia, namely:

1. Weaknesses in aspects of institutional performance,

2. Weaknesses in the performance aspect of Human Resources (HR) of administrators and managers who do not yet have the competence and expertise in managing financial institutions such as cooperatives,

3. Weaknesses in aspects of financial performance and capital,

4. Weaknesses in aspects of cooperative partnerships with other business entities,

5. The role of the government that has not fully supported the progress of cooperatives by preparing supporting institutions such as : Supervisory institutions (autonomous institutions such as the Financial Services Authority), the Deposit Insurance Corporation (Lembaga Penjamin Simpanan) for cooperative members, and regulations that favor the people's economy.

The cooperative development strategy needs to get a portion of the government's attention more than other financial institutions if the government is serious about advancing the people's economy, infrastructure and superstructure must be prepared like a banking institution. In the success of cooperatives as the pillars of the people's economy, it is necessary to prepare a development strategy through an economic democratic system in order to empower the people's economy. In the era of the industrial revolution 4.0, cooperatives must also be able to adapt and apply digital-based information technology in managing their operations.

With the various strengths of cooperatives and by eliminating existing weaknesses, cooperatives can ideally be important actors in supporting the economic system of the Indonesian State which was built by the majority of the people belonging to the Micro, Small and Medium Enterprises group and what needs attention is how positioning cooperatives in the national economic system. The perspective of members is an important factor in increasing the growth of cooperatives because members are users and owners of cooperatives.

The acceleration of development in Banten Province can be implemented if the correct, clear and measurable development strategies, directions and policies are set so that they can serve as guidelines. The implementation of development must substantially focus on human development, decentralized, religious-breathing (according to the condition of the religious Banten community) and culture, and care for the environment, both the physical environment and the social environment. Therefore, the emphasis is ideally on meeting the needs of the

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community, placing humans as objects of development and always being oriented towards improving the welfare of the community.

B. LITERATURE REVIEW Microfinance Accessibility

Access to finance is the ability of small businesses to take advantage of financial services, including credit and savings. The body of literature has found that access to finance drives growth through financial services and financing. (Shahinpoor, 2009; Glemarec, 2012;

Brixiová, Kangoye and Yogo, 2020) rationalizes the importance of access to finance in company development. Menyeh (2021) reaffirms the common perspective that “finance does not cause growth; finance responds to changing demands from the real sector.” On the contrary, the availability of finance for the company is what determines the growth of the business. The literature claims that access to finance is a major constraint in achieving microenterprise growth. Therefore, the openness of financial institutions to support capital needs is very important in overcoming obstacles to the growth of micro-enterprises (Katongole, 2020; Ndlovu and Toerien, 2020).

The purpose of this research is to gain understanding, knowledge and evaluate the information that people receive in order to empower them to buy financial products and services that suit their needs.

Research on perceived benefit in microfinance is still limited. Some of those available revolve around the broad concept of "financial literacy". This highlights the shallowness in the true depth of the studies available in this vast realm. One of the major constraints in financial literacy research is that studies are based on success stories, mostly measured on the relative returns earned. Measuring financial literacy itself is a complex task but awareness and perception is undoubtedly the basic board on which the index is built. Nanayakkara, (2017); Domapielle (2021) argues that awareness as a key component in financial literacy gives clients the knowledge, skills and confidence to understand and evaluate the information they receive empowering them to purchase financial products and services that meet their needs.

Utilisation of Microfinance

Utilization is the planned and programmed use of allocated funds following strict financial discipline which is very important. Othman and Ameer (2015); Souza, Bassi and Ferreira de Freitas (2019); Bongomin, Woldie and Wakibi (2020) in their study based in Pakistan concluded that Urban people get loans for pure intention to invest in business activities and personal use whereas rural people get loans for purposes of use in agricultural activities and most importantly rural people never take out microfinance loans for personal use. Women's thinking style is very much at odds with men's in terms of "what microfinance helps them in."

Recently researchers have come to the conclusion that microcredit is not for every household and does not lead to miraculous social transformations. The primary impact appears to be allowing some households to cut back on spending on tempting or vacation items to finance major purchases, either for their homes or to set up or expand businesses (Banerjee and Jackson, 2017; Jasuni, Firdaus and Sanim, 2018; Drori et al., 2020).

C. METHOD

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Administratio, Vol. 14 (1) 2023: 99-112 | 107 This study utilized a quantitative approach by using a structured questionnaire developed for the purpose in consultation with experts in the field. Organisers of the Microfinance institution helped in identifying the cluster and the borrowers were selected by random pick.

The structure questionnaire schedule was given to the borrower directly and the response to each aspect was obtained. The doubts and queries of the borrower were immediately clarified on the spot so that the data could be collected without any bias. The survey instruments contained five-point Likert Scale questionnaires to measure respondents’ level of agreement and disagreement and their perception of variables. A moderated regression analysis was conducted.

D. RESULT AND DISCUSSION

The results show that perceived benefit was a significant predictor when access was included in the model, with B = 0.10, indicating that the third criterion for mediation was satisfied. The results further show that access to finance was not a significant predictor when microfinance accebility was included in the model, with B = 0.02, indicating that the fourth criterion for mediation was satisfied. Since all four criteria were satisfied, a complete mediation is supported. The result supported H3 which states that the relationship between microfinance accebility and the utilisation of microfinance mediated by perceived benefit.

Table 1. The mediation effect

Dependent Independent B SE t P

Regression 1 Perceived

Benefit

Microfinance Accebility

0,04 0,02 2,19 0,029

Regression 2 Utilisation of

microfinance Microfinance

Accebility 0,12 0,03 3,83 0,001

Regression 3 Perceived

Benefit Microfinance

Accebility 0,02 0,02 1,51 0,133

Utilisation of

microfinance 0,10 0,02 4,39 0,001

The present study employed mediation analysis to examine the relationship between microfinance accessibility, perceived benefit, and the utilization of microfinance. The results of the regression analyses are presented in Table 1, and they provide evidence for the mediating role of perceived benefit in the relationship between microfinance accessibility and microfinance utilization.

In the first regression (Regression 1), the predictor variable was microfinance accessibility, and the outcome variable was perceived benefit. The results indicate that microfinance accessibility had a significant positive effect on perceived benefit (B = 0.04, SE

= 0.02, t = 2.19, p = 0.029), satisfying the first criterion for mediation. This finding suggests that individuals who had greater access to microfinance perceived more benefits associated with its utilization.

In the second regression (Regression 2), the predictor variable was again microfinance accessibility, but the outcome variable was the utilization of microfinance. The results demonstrate that microfinance accessibility had a significant positive effect on microfinance utilization (B = 0.12, SE = 0.03, t = 3.83, p = 0.001), satisfying the second criterion for

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mediation. This finding suggests that individuals with better access to microfinance were more likely to utilize it.

The third regression (Regression 3) aimed to investigate whether perceived benefit mediated the relationship between microfinance accessibility and microfinance utilization.

Microfinance accessibility and perceived benefit were included as predictor variables, and the outcome variable was microfinance utilization. The results reveal that microfinance accessibility was no longer a significant predictor of microfinance utilization (B = 0.02, SE = 0.02, t = 1.51, p = 0.133) when perceived benefit was added to the model. This finding satisfies the fourth criterion for mediation, indicating that perceived benefit fully mediates the relationship between microfinance accessibility and microfinance utilization.

In summary, the results provide support for Hypothesis 3 (H3), which posited that the relationship between microfinance accessibility and microfinance utilization would be mediated by perceived benefit. The findings suggest that individuals with better access to microfinance perceive more benefits associated with its utilization, and these perceived benefits subsequently lead to increased utilization of microfinance. These results contribute to the understanding of the underlying mechanisms through which microfinance accessibility influences its utilization, highlighting the importance of perceived benefit as a mediator in this relationship.

E. CONCLUSION

The utilization of microfinance is an ongoing challenge in developing countries, especially in Indonesia. The purpose of understanding why the utilization of microfinance is not achieved can be clarified by the results of the study. This study shows that microfinance accessibility has not resulted in the utilization of microfinance. The mediating effect of microfinance can lead to expansion when access to finance is maximized for investment. The inability to utilize capital for expansion can be attributed to the lack of other variables such as literacy. In contrast, micro-enterprises do not maximize finances but utilize their own capital or interest-free loans

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