The Perception of Medium Scale Entrepreneurs on Credit Decision Making

Abstract

The use of credit as a funding source must be based on careful planning and decision making, especially for medium scale entrepreneurs. Incorrect use of credit may cause problems for medium scale entrepreneurs. Therefore, the acts of medium scale entrepreneurs in using credit as a funding source are closely related to their perception of the benefits and risks of the credit obtained from financial institutions. Consequently, this research aims to reveal the perception of medium scale entrepreneurs in utilizing credit as a funding source. This research uses 74 respondents as samples, which consist of medium scale entrepreneurs in Surabaya, Indonesia. This research is categorized as a qualitative descriptive research. The data were obtained through questionnaires distributed to medium scale entrepreneurs who used credit as a funding source in running their business. The result of this research suggests that the highest average value indicates that medium scale entrepreneurs perceive credit as a stimulus to act carefully in managing and using their money. This research also concludes that education and business experience as demographic factors hold significant values towards credit as stimulus. Likewise, age and business experience as demographic factors are also perceived to have significant values on credit as burden.