The Impact Of Covid-19 On Smes' Access To Financial Institutions In Aceh Province, Indonesia

The outbreak of Covid 19 that occurred worldwide in almost every part of the world at the beginning of 2020, including in Indonesia, has created negative sentiment against different business lines , especially the MSME business [1][2][3]. The negative impact of the outbreak of Covid-19 has hindered the growth of the MSME industry, where physical distancing and the movement of large-scale social constraints (PSBB) are considered to impede the movement of MSME companies involving showrooms or promotions[4][5][6] MSMEs are facing difficulties in repaying loans to financial institutions because, due to the effects of Covid-19, the profits earned often decrease because of the decrease in the amount of income received[7][8][9]. As a result, many MSMEs tend to fund their own business models that are restricted to carrying out business operations, making it impossible for their companies to grow and expand [10][11]. Multiple solutions can be provided to challenges and capital problems for any company belonging to micro and small enterprises (MSEs)[12], one of the efforts that can be done is to add a number of organizations or parties that become sources of funding [13][14][15]. Financing sources may come from the own resources of the entrepreneur (internal) or from other parties (external)[16][17]. Furthermore, in the loan application process, the degree of group awareness about the actual procedures is still very limited [18]. In comparison to rural populations that still use traditional transaction practices, urban communities may be more likely to access loans to financial institutions. This is compounded by the fact that market actors still feel that the protocols adopted are difficult to execute[19][20]. Interest rates, supplies and credit procedures are the key factors for bank institutions that affect the capital structure of MSMEs [21] [22]. Most MSMEs in different countries , especially developing countries, find it difficult to get loans from banks based on empirical evidence from different studies [23]. Different credit procedures, interest rates and types of services decided by the bank give rise to this situation [24]. This restriction is compounded by the current laws and regulations requiring banks to[25