Determinants of Financial Performance melalui Access to Finance di UMKM Kepulauan Nias

Abstract

Micro, Small, and Medium Enterprises (MSMEs) based on home industries in the archipelagic regions face serious challenges in managing finances and accessing formal financing services. This study aims to analyze and assess the influence of financial literacy, financial inclusion, debt financing, strategic orientation attributes, innovation, financial culture, and access to finance on the financial performance of MSMEs in the Nias Archipelago. Specifically, this research explores the mediating role of access to finance in strengthening the impact of these variables on the financial performance of MSMEs. This study employs a quantitative approach with a population of 440 home industry MSMEs in the Nias Archipelago. The sample size is determined using the Slovin formula, resulting in a sample of 210 home industry MSMEs spread across five administrative regions in the Nias Archipelago. The sampling technique used is proportional random sampling, based on the distribution proportion of MSMEs in each district, with Simple Random Sampling applied. The data analysis technique uses Structural Equation Modeling-Partial Least Squares (SEM-PLS), supplemented with Importance-Performance Map Analysis (IPMA) and multi-group analysis (MGA). The results show that strategic orientation attributes are the most significant positive and direct influencer of financial performance, both directly and indirectly through access to finance. Financial inclusion, financial culture, and access to finance also show a positive and significant influence on financial performance. In contrast, financial literacy and debt financing have a negative influence, while innovation does not show a positive effect. The IPMA results indicate that the main priority for strengthening should be on strategic orientation attributes, innovation, and financial literacy, with the potential for performance development ranging from 11.12% to 24.36%. These findings have important implications for local governments and financial institutions to design interventions focused on enhancing the internal capabilities of MSMEs and expanding access to affordable financing.