Authors : Tatik Suryani, R.R. Iramani and Lindiawati
Abstract: Lack of Financial capability of Small-Medium Enterprises (SMEs) potentially lead to problems disturbing performance and growth of SME in Indonesia. This lack also triggers the loss of their competitive advantage. This problem arises from the less of financial literacy and capability for managing finance. The objective of this research is to identify financial capability within SME’s and design application tools to facilitate their financial management. Using qualitative methods, this research interviewed 102 entrepreneurs in East Java producing local prominent products. Questionnaires were used to measure SME business performance and financial capability such as financing decision, investment decision and profit management. Triangulation was used by confirming the interview data, quantitative data and FGD data. Statistic descriptive was used to analyze the data resulting that 78% of SME has good business performance. Their current sales grew more than 11%, the problem is that is not easy to investigate their financial performance This growth rate can be increased if they have eagerness to take a risk by investing more for increasing their production to penetrate markets. In more detailed way, it was identified the lack financial capability made them difficulty to manage on preparing financial record, loss-profit report, cash report and assets. By using financial software application they can manage the financial, so the financial management practices is getting better and in influence their business performance.
Tatik Suryani, R.R. Iramani and Lindiawati , 2017. Financial Capability of SMEs in Indonesia and the Solutions by Using Financial Application. International Business Management, 11: 1499-1503.