Category - Nuri WULANDARI

Micro and small enterprise development are crucial to support a country’s economy, and microfinance is vital to support its growth. Currently, the microfinance industry is faced with two main challenges: to reduce credit risk and to avoid losing sight of its social purpose. The study argues that this is a matter of vicious circle that can be broken using a practical credit application evaluation. The research purpose is to investigate an alternative method for credit application assessment using one of classic sociological theory, the three forms of capital, consisting of economic capital, social capital, and cultural capital. A survey of 100 e-entrepreneurs operating in e-commerce revealed that only two of the three capitals affect the credit potential variable. The uniqueness of the study is in the utilization of alternative behavioral data, including social media activity, informal training, and religiosity to measure the credit potential of a respondent. The study’s results...