Determining MSME Financing Access: The Role of Human Resources Capacity, Business Networks, and Financial Competence

Abstract

This study aims to examine the determinants of access to financing among Micro, Small, and Medium Enterprises (MSMEs) in West Sumatra, with a particular focus on the roles of human resource capacity, business networking, and financial competence of MSMEs. Drawing on the Resource-Based View (RBV), this study positions human resource capacity and business networking as strategic resources, while financial competence is conceptualized as a strategic capability that enhances access to financial resources. This study employs a quantitative approach using a causal research design, with data collected from 120 culinary MSME actors in West Sumatra and analyzed using Partial Least Square Structural Equation Modeling (PLS-SEM). The results indicate that human resource capacity and business networking significantly influence financial competence and ease of access to financing. Furthermore, financial competence partially mediates the relationships between human resource capacity, business networking, and financing access. These findings highlight that improving human resource quality, strengthening business networking, and enhancing financial competence are important factors in increasing MSMEs’ access to financing.