The role of entrepreneurship oriented finance in improving MSME performance: The demand side of the entrepreneurial finance perspective

Abstract

This research strives to examine the influence of financial access towards the performance of micro, small, and medium enterprises (MSMEs) through entrepreneurship oriented finance. The research respondents were comprised of 265 batik MSME entrepreneurs from three regions in Central Java Province in Indonesia, which are Pekalongan Regency, Rembang Regency, and Surakarta Municipality. Structural Equation Modeling (SEM) was used to synchronously test the data. The research results revealed that financial access, entrepreneurial orientation, and entrepreneurship oriented finance have a positive influence on MSME performance. In addition, financial access, business prospect, entrepreneurial orientation, and government policy support have a positive influence on entrepreneurship oriented finance. Furthermore, entrepreneurship oriented finance mediates the influence between business prospects, entrepreneurial orientation, and government policy support towards MSME performance.