Small Business Financing and Bank Performance : Empirical Study of Indonesian Publicly Banks

The aim of this paper is to investigate small businesses financing in Indonesia. Many programs in financing small businesses have been undertaken through some collaboration between banks, government, other related parties. The study employed descriptive and inferential statistics to explain the data characteristics of small businesses financing from Indonesia publicly banks and tried to determine whether those financing had the association with and influenced the bank performance for the period of 2004-2007. The data were collected from Bank Indonesia and Indonesian Capital Market. The result of the study showed that the small business financing significantly influenced the bank performance in Indonesia especially within the study period.