Effectiveness Of MSMEs Financing To Poverty Allevation In Developing Countries and Opportunities To Reduce Poverty Due To Covid-19 : Experience From Indonesia

Ade Yunita Mafruhat, Nopi Nopi Hernawati, Meidy Haviz

Abstract


This article attempts to describe the effectiveness of the MSME loan program for reducing poverty in developing countries and the opportunities for MSME credit to reduce poverty due to Covid-19 based on experience in Indonesia. The existence of Covid 19 at the end of 2019 made the economy in developing countries including Indonesia even worse. One of the assistance programs to reduce poverty in Indonesia is a special loan fund for micro, small and medium enterprises. The research methodology used is quantitative-descriptive with the Panel Vector Error Correction Model (P-VECM) approach. The data used are MSME loan data and poverty rates in 34 provinces in Indonesia obtained from Bank Indonesia and the Indonesian Central Bureau of Statistics. The results of this study found that MSME loans have a long-term and short-term relationship with poverty reduction. In addition, MSME loans also have a great opportunity to help minimize poverty due to Covid-19.

Keywords


UMKM Lending, Poverty Alleviation, Developing Countries, Evektiveness, Covid-19

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References


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DOI: https://doi.org/10.29313/de.v14i2.11714

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