Research Article Open Access

Rural Banking: The Strategic Solution in Capital Strengthening and Performance of Micro and Small Agribusiness Enterprises in South Sumatera Indonesia

Abstract

The aim this study is to obtain the empirical evidence about the program effect of rural banking toward the micro and small agribusiness enterprises in South Sumatera. Primary data was collected through survey technique from 250 respondents and taken by random sampling method and was analyzed by structural equation modelling (SEM). The study result showed that in aggregate programs of rural banking which consisted of business financing, management skill, and business monitoring had a positive effect toward internal resources and competitive advantage of business. Internal resources had a positive effect toward competitive advantage; internal resources and competitive advantage had a positive effect toward business performance. It means the hypothesis was accepted. The goodness of fit indices showed that the analysis is to be inadmissible or interchangeable or having a meaning which is called unidimensionality as a new concept that tested factually based on empirical data.

M. SYAHIRMAN YUSI, UMIYATI IDRIS

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