FINANCIAL INCLUSION, ACCESS TO CAPITAL, AND CORPORATE GOVERNANCE ON THE SUSTAINABILITY OF SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) IN THE RATTAN CRAFT INDUSTRY IN JEPARA REGENCY

Abstract

Purpose: The purpose of this study is to determine the effect of financial inclusion, access to capital, and corporate governance on the sustainability of rattan handicraft SMEs in Jepara Regency.

Methodology/approach: The sampling technique used is purposive sampling with the criteria of rattan handicraft SMEs in Jepara Regency that have been operating for more than one year and are still actively conducting business. The respondents consist of 91 SME entrepreneurs. The data analysis technique used is Partial Least Square (PLS).

Results/findings: The research results show that financial inclusion, access to capital, and corporate governance have a positive and significant effect on the sustainability of rattan handicraft SMEs in Jepara Regency.

Limitations: The limitations of this study include the geographical scope, which is restricted to rattan handicraft SMEs in Jepara Regency, so the results may not be generalizable to other sectors or regions. Additionally, other factors that may influence business sustainability, such as market conditions or regulations, have not been fully explored in this study.

Contribution: This study provides insights for rattan SME entrepreneurs in Jepara on the importance of financial inclusion, access to capital, and corporate governance. In addition to helping the government design SME policies, it enriches economic literature and can be used by financial institutions for SME financial inclusion programs.

Novelty: This study analyzes three main factors influencing the sustainability of rattan handicraft SMEs in Jepara: financial inclusion, access to capital, and corporate governance. The results show a significant relationship between financial inclusion and access to capital with business sustainability, as well as the importance of good corporate governance.