A NEW APPROACH OF BANK CREDIT ASSESSMENT FOR SMES

This research is aim to discover a solution for some difficulties on accessing bank credit by small and medium enterprises. Much research has been conducted in various countries in Asia especially in Indonesia on this issue, but not much has been focused on the method of assessment of credit by banks. Through several case studies in West Java province, this research reveals new method of credit assessment in several rural banks that replace the traditional 5C method. Using mixed method starts with document study of credit application, statistical test along with observation and interview on several small and medium business entrepreneurs, this study has resulted in findings of small entrepreneurs' credit applications approved by banks using new method called 3 pillars. The result also shows that collateral as key factor to accept or reject credit application previously, is no longer significant. Hopefully, the result of this research could provide another solution for either bank or SMEs to assessing-accessing credit and get some funding from banks. From this study it is also proved that this 3 pillars solution increase the access to get funding from banks, and improve the company's performance in terms of sales and net profit because its increase production capacity.