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and small enterprise are mostly engaged in agricultural sector therefore they have strategic roles in agricultural and rural development, and also in reduction of
unemployment and poverty.
1.2 Statement of Problem
MSMEs development in Indonesia also faces lack of access to credit, especially access to formal credit. In West Java, only 25 percent of MSMEs get
credit from banks. Other problems facing by MSMEs in Indonesia are marketing problem and lack of knowledge and technology extension BPS, 2006. These
problems lead to a lower competitiveness of MSMEs compared to the big enterprise. As evidence
, MSMEs‟s contribution to Indonesian export was very low only 17.02 percent. Especially for micro and small enterprises which are the
biggest part of MSMES, their export contribution was only 1.51 percent and 3.57 percent BPS, 2009.
Central Sulawesi is one of agricultural based province in Indonesia. In 2010, there are 213 thousand MSMEs in Central Sulawesi, and mainly they are
involved in Agricultural sector. Agricultural sector‟s share in GDP reaches 41.56
percent BPS of Central Sulawesi, 2010. The main agricultural products of Central Sulawesi are cocoa, coconut, rice, maize, and rattan. MSMEs in Central
Sulawesi sell their product not only as fresh product, but also in processed product such as brown sugar and handy craft. A survey conducted by Bank of Indonesia in
2011 showed that lack of credit access is one of the main problems faced by MSMEs in Central Sulawesi. Bank of Indonesia suggested the government of
Central Sulawesi to enhance credit access of MSMEs by implementing micro finance program like Micro Credit without Collateral for Microenterprise
KUMLTA = Kredit Usaha Mikro Layak Tanpa Agunan. Nuryartono 2005 has studied about credit constrains among farmer
household in rural area of the forest margin of the Lore Lindu National Park, Central Sulawesi, Indonesia. His research reported that is only 21.5 of the
households have access to formal credits, and only 18.1 of the households are not credit constrained. Most households are credit constrained because of lack of
collateral and self-selection problem. This thesis will continue his study with the
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emphasis to non-agricultural enterprises, such as manufacturer, trader, and service and to credit from formal lenders. Agricultural and non agricultural sectors are
linked as one chain in agribusiness system. The non agricultural firms are important to support the agricultural sector especially in terms of
commercialization process of agricultural sector. According to the background, there are several research questions
addressed in this research: 1. What are the determinants of access to credit of MSMEs in Central Sulawesi,
Indonesia? 2. How does the role of access to credit in the success of MSMEs?
1.3 Objectives of Study
