The Effect of People Business Credit on SME’S Development in Central Sulawesi, Indonesia

The objectives of this research are: (1) to describe SME’s businessman characteristicsin Central Sulawesi, (2) to analyze the effectiveness ofmanagement of People's Business Creditprogram (capital, manpower absorption, total credit, length of business) to increase added value(profit) for SME’s that have obtained credit through the People's Business Credit (KUR)program. Dummy variable of this study including education, business type, and businesslocation.Population of this research covers all community in targeted location who havereceived business credit from financial institution in Poso Regency, Donggala Regency, ParigiMoutong Regency, and Palu City. The number of sample in this research 270 SMEs that havebeen counted using Slovin method. Analysis methods used in this study consisting of descriptiveanalysisand multiple linear regression. The results show that characterist ics of SME’sbusinessman were found to be homogeneous in terms of age, gender, level of education, numberof family dependents, type of business, business experience, business location, sales income,capital fund, capital source, amount of credit, and marketing problems. The results also suggestthat the effect of capital before receiving credit, employees, amount of credit, length of business,education, type of business, and business location simultaneously perform significant effect onbusiness income. The capital before receiving credit, amount of credit, length of businessperform positive and significant effect on business income of SME’s which received credit.Meanwhile, education, type of business and business location did not perform significant effecton business income of SME’s that have received credit