Impact Analysis of Green Microfinance, Government Regulation, and Environmental Credit Innovation on MSME Productivity in Yogyakarta
DOI:
https://doi.org/10.58812/wsshs.v3i01.1659Keywords:
Environmental Credit Innovation, Green Microfinance, Government Regulation, MSME ProductivityAbstract
This study investigates the impact of Environmental Credit Innovation, Government Regulation, and Green Microfinance on the productivity of Micro, Small, and Medium Enterprises (MSMEs) in Yogyakarta, Indonesia. Using data from 140 MSMEs, the research employs Structural Equation Modeling with Partial Least Squares (SEM-PLS 3) to analyze the relationships between these factors. The results show that all three variables—Environmental Credit Innovation, Government Regulation, and Green Microfinance—positively influence MSME productivity. Specifically, Environmental Credit Innovation, Government Regulation, and Green Microfinance significantly contribute to improving MSME performance. The model explains 71.3% of the variance in MSME productivity, indicating substantial explanatory power. Additionally, the predictive relevance of the model highlights its practical utility for policy recommendations. The findings suggest that fostering environmentally responsible practices, simplifying regulatory processes, and expanding access to green finance are key drivers for boosting MSME productivity in the region.
References
H. B. Ginting and S. Rijal, “Assessing The Role Of Environmental Innovation, Credit Access, And Governance In Shaping The Financial Sustainability Of Indonesian MSMEs,” J. Econ. Bussines Account., vol. 7, no. 4, pp. 10834–10852, 2024.
A. A. Al Attqia, A. Arifudin, M. H. Jamaludin, T. F. Haikal, and R. Bayhaqi, “Analisis Pengembangan Usaha Kecil dan Menengah di Lingkungan Berpenghasilan Rendah,” J. Ekon. dan Pembang. Indones., vol. 2, no. 2, pp. 264–271, 2024.
D. Parwati and S. Darmansyah, “Social Media Literacy and Its Impact on Menstrual Hygiene Awareness among Adolescent Women: Literasi Media Sosial dan Dampaknya pada Kesadaran Kebersihan Menstruasi di Kalangan Remaja Putri,” Al-Adawiyyah J. Sains, Farm. dan Kesehat., vol. 1, no. 1, pp. 27–51, 2024.
S. Mahmood, H. Sun, A. Iqbal, A. H. Alharbi, D. S. Khafaga, and E.-S. M. El-kenawy, “The Role of Green Finance in Promoting Sustainable Development Goals (SDGs) Through the Mediation Effect of Green Technology Innovation,” 2024.
H. Hasanuddin, D. Rimbano, A. Nuraini, D. Kuswandi, and A. R. Makkulau, “Green Finance: Unlocking The Potential Of Sustainable Investment For Future Business Growth,” Brand. J. Manaj. dan Bisnis, vol. 3, no. 1, 2024.
G. Malhotra and K. S. Thakur, “Evolution of green finance: A bibliometric approach,” Gedrag Organ. Rev., vol. 33, no. 2, pp. 583–594, 2020.
D. M. Nugraha and I. M. Hendrati, “Analisis Pengaruh Tenaga Kerja UKM, Investasi UKM, dan Ekspor UKM Terhadap Pertumbuhan Ekonomi di Indonesia,” EKOMBIS Rev. J. Ilm. Ekon. Dan Bisnis, vol. 11, no. 1, pp. 777–786, 2023.
D. L. Novianti, A. Saptono, and A. Wibowo, “Pengaruh Fasilitas Modal, Inovasi Produk, dan Literasi Digital pada Pengembangan Usaha Mikro, Kecil, dan Menengah di Wilayah Kota Depok,” eCo-Buss, vol. 7, no. 1, pp. 495–508, 2024.
S. N. P. Putri, D. R. Munir, and A. I. N. Husna, “EDUKASI PENGEMBANGAN UMKM GUNA MENINGKATKAN PROFITABILITAS MASYARAKAT DESA MARGALUYU,” J. Pendek. Nusant., vol. 1, no. 3, 2024.
R. Lubis, J. E. Putra, T. Widayati, N. Ladjin, and A. H. Al Fajar, “Peran dan Strategi UMKM dalam Mengurangi Tingkat Pengangguran di Indonesia,” El-Mal J. Kaji. Ekon. Bisnis Islam, vol. 5, no. 8, pp. 4082–4094, 2024.
J. Sirait, H. Alrasyid, and N. A. Soraya, “Strengthening The Defense Industry’s Independence Through The Internet Of Things In The Manufacturing Sector: A Review,” Int. J. Sci. Technol. Manag., vol. 4, no. 2, pp. 335–340, 2023.
A. S. Prawoto, “System information and implemented business strategies MSME companies:(Case Study of Bakmi Jowo Bu Citro),” Int. J. Eng. Bus. Soc. Sci., vol. 2, no. 6, pp. 1347–1351, 2024.
R. M. B. Moser and L. Gonzalez, “Green microfinance: a new frontier to inclusive financial services,” Rev. Adm. Empres., vol. 56, no. 2, pp. 242–250, 2016.
A. Ademosu, “The Impact of the Financial System and its Channels on SMES’Access to Financing: A Nigerian Perspective,” 2022.
T. G. Hoang, P. T. Nguyen, and M. Le Bui, “Green Finance Initiatives in Developing Countries: Unveiling Critical Perspectives for Advancing Sustainability, Environmental Stewardship, and Ethical Management,” 2024.
J. F. Molina‐Azorín, E. Claver‐Cortés, M. D. López‐Gamero, and J. J. Tarí, “Green management and financial performance: a literature review,” Manag. Decis., vol. 47, no. 7, pp. 1080–1100, 2009.
C. Shan and X. Ji, “Environmental Regulation and Green Technology Innovation: An Analysis of the Government Subsidy Policy’s Role in Driving Corporate Green Transformation,” Ind. Eng. Innov. Manag., vol. 7, no. 1, pp. 39–46, 2024.
L. A. Khakim and A. Firmansyah, “Strengthening The Existing Indonesian Government Policies Related to MSMEs to be Sustainable,” Incl. Soc. Sustain. Stud., vol. 3, no. 2, pp. 17–28, 2023.
B. M. Omowole, A. Q. Olufemi-Philips, O. C. Ofodili, N. L. Eyo-Udo, and S. E. Ewim, “Conceptualizing green business practices in SMEs for sustainable development,” Int. J. Manag. Entrep. Res., vol. 6, no. 11, pp. 3778–3805, 2024.
D. A. Prihastiwi, A. N. Fatimah, and Y. A. Nurcahya, “Determinants of Indonesian MSMEs’ Green Investment Choices Towards Inclusive and Sustainable Economic Growth,” in IOP Conference Series: Earth and Environmental Science, IOP Publishing, 2023, p. 12015.
G. N. Achmad et al., “Government support, eco-regulation and eco-innovation adoption in SMEs: The mediating role of eco-environmental,” J. Open Innov. Technol. Mark. Complex., vol. 9, no. 4, p. 100158, 2023.
R. Pranisya, P. P. Sari, and A. Maulida, “The Effect of Financial Literacy, Technology Financial Literacy and Financial Inclusion on MSME Performance,” J. Ekon. Dan Bisnis, vol. 25, no. 2, pp. 244–255, 2024.
B. Surya, F. Menne, H. Sabhan, S. Suriani, H. Abubakar, and M. Idris, “Economic growth, increasing productivity of SMEs, and open innovation,” J. Open Innov. Technol. Mark. Complex., vol. 7, no. 1, p. 20, 2021.
S. Khurana, A. Haleem, and B. Mannan, “Determinants for integration of sustainability with innovation for Indian manufacturing enterprises: Empirical evidence in MSMEs,” J. Clean. Prod., vol. 229, pp. 374–386, 2019.
D. Mukherjee, “Productivity in the small manufacturing enterprises: determinants and policy issues,” 2004.
A. I. Kato, E. G. Chiloane-Tsoka, and P. Mugambe, “Unlocking the potential: the influence of sustainable finance solutions on the long-term sustainability of small and medium-sized enterprises,” Cogent Bus. Manag., vol. 11, no. 1, p. 2391122, 2024.
T. O. Valerievna and G. I. Igorevna, “SUSTAINABLE FINANCING AS A FACTOR INFLUENCING ECO-FRIENDLY BUSINESS TRANSFORMATION: EXISTING CHALLENGES AND POTENTIAL SOLUTIONS,” Am. J. Interdiscip. Innov. Res., vol. 6, no. 10, pp. 8–20, 2024.
A. Demirgüç-Kunt and L. F. Klapper, “Measuring financial inclusion: The global findex database,” World bank policy Res. Work. Pap., no. 6025, 2012.
M. Zhang, C. Li, J. Zhang, and H. Chen, “How green finance affects green total factor productivity—evidence from China,” Sustainability, vol. 16, no. 1, p. 270, 2023.
R. J. Gamba and S. Oskamp, “Factors influencing community residents’ participation in commingled curbside recycling programs,” Environ. Behav., vol. 26, no. 5, pp. 587–612, 1994.
F. M. Ogunyemi and A. O. Ishola, “Data-driven financial models for sustainable SME growth: Integrating green finance into small and medium enterprise strategies,” 2024.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 Tera Lesmana, KMT Lasmiatun, Rani Eka Arini
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Facebook 
Instagram 
Twitter 
Youtube 
westscience.journals@gmail.com