Factors Affecting Access to Microfinance Institutions for MSMEs Entrepreneurs in Boun Neua District, Phongsaly Province

Abstract

This research aims to study the business conditions and access to microfinance institutions for MSMEs entrepreneurs and  The importance of factors affecting access to microfinance institutions for MSMEs entrepreneurs in Bounneua District, Phongsaly Province. A questionnaire was used as a tool to collect data from a group of MSMEs entrepreneurs in Bounneua District, Phongsaly Province, who are target customers of microfinance institutions. This research is a quantitative study, starting with describing the data changes in descriptive statistics with frequency values, percentages, mean values, and standard deviations.

The results found that the business conditions and access to sources of finance of MSMEs entrepreneurs in Bounneua District, Phongsaly Province, found that business operations are individual enterprises that include the trade, production, and service sectors. The business period is 5-10 years, and the purpose of running the business is personal preference. The source of start-up capital for business operations is self-funding, and the source of revolving capital for business operations is from loans from microfinance institutions. In terms of access to sources of finance from microfinance institutions, MSMEs entrepreneurs can access sources of finance (approved) for only 39% of them, while the rest still do not have access to sources of finance. The importance of factors affecting access to capital includes the following: Collateral, Capital, Capacity, and Cost of capital, Control & Compliance, Character, Business, and Process. Entrepreneurs assign the highest importance to these factors, respectively. Entrepreneurs give the medium importance to economic conditions. However, overall, the importance of factors affecting access to capital is the highest with a mean value of 4.37 and a standard deviation of 0.48.