Capital Strengthening of Micro-enterprises for Poverty Reduction in East Java

Reduction in the number of those in poverty needs to be followed by increased productive economic activity. Productive effort is an effort to produce goods or services to provide added value and increase income for micro entrepreneurs. The poverty reduction program used in East Java is reduction of poverty from Cluster 3 based on the economic empowerment of the Ministry of Micro-, Small-, and Medium Enterprises. This article aims to measure efficiency of the micro-enterprises industry sector in achieving poverty alleviation programs in East Java, secondly to identify factors that affect the efficiency of micro-enterprises in the use of government credit program in East Java, and, lastly, to measure poverty status of micro-enterprises in using government credit program in East Java. Methods used in this research are Data Envelopment Analysis, Tobit Regression and Logistic Regression. After analysis, the results of average technical efficiency industry sector based on VRS assumptions are 0.86 and 0.8 with assumption of CRS. Then, the results of Tobit regression, factors affecting the efficiency of SMEs, namely, profit, age, education, experience, assets, credit access government program, and realization periods, show a positive impact on the technical efficiency of micro-enterprises in East Java. Study results of logistics regression are technical efficiency, government credit program access, expenditure, gender of family head and home location affecting on poverty status of micro-enterprises in East Java.     Keywords: efficiency, poverty, micro-enterprise