5C Credit Analysis, SLIK Utilization, and ICS Readiness Determine MSME Financing Access through Credit Decision

Eva Septriani Sianipar; Mokhamad Anwar; Asep Mulyana

doi:10.37641/jimkes.v14i3.5188

Authors

Eva Septriani Sianipar Universitas Padjajaran, Indonesia
Mokhamad Anwar Universitas Padjadjaran, Indonesia
Asep Mulyana Universitas Padjadjaran, Indonesia

DOI:

https://doi.org/10.37641/jimkes.v14i3.5188

Keywords:

5C Credit Analysis, Credit Decision-Making, Financing Access, Financial Information Service System, Innovative Credit Scoring, Rural Banks

Abstract

Micro, Small, and Medium Enterprises (MSMEs) are key drivers of economic development but often face financing constraints due to limited collateral, weak credit histories, and information asymmetry. This study examines how 5C credit analysis, Financial Information Service System (SLIK) utilization, and Innovative Credit Scoring (ICS) readiness influence MSME credit decision-making and financing access in Rural Banks in North Sumatra, Indonesia. The study further investigates whether credit decision-making mediates the relationship between these assessment mechanisms and financing access. A quantitative survey was conducted with 290 credit decision-makers, including directors, branch managers, and credit officers. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) to evaluate direct, indirect, and total effects among the constructs. The findings indicate that 5C credit analysis significantly influences credit decision-making but does not directly impact MSME financing access, with its effect fully mediated through credit decisions. In contrast, SLIK utilization and ICS readiness significantly affect both credit decision-making and financing access, with credit decisions partially mediating these relationships. Credit decision-making serves as the primary mechanism translating institutional assessment into actual financing, highlighting the importance of integrating traditional and digital credit assessment tools to support prudent and inclusive MSME financing in rural banks.

Downloads

Download data is not yet available.

References

Abi, R. (2025). Machine learning for credit scoring and loan default prediction using behavioral and transactional financial data. World Journal of Advanced Research and Reviews, 26(3), 884–904.

Addy, W. A., Ajayi-Nifise, A. O., Bello, B. G., Tula, S. T., Odeyemi, O., & Falaiye, T. (2024). AI in credit scoring: A comprehensive review of models and predictive analytics. Global Journal of Engineering and Technology Advances, 18(2), 118–129.

Adebayo, S. O. (2025). Data-driven credit risk management and financial stability in the digital era: Integrating behavioral analytics, FinTech innovations, and advanced scoring models. European Index Library of European International Journal of Multidisciplinary Research and Management Studies, 5(09), 53–58.

Al Maruf, A., Kowsar, M. M., Mohiuddin, M., & Mohna, H. A. (2024). Behavioral factors in loan default prediction: A literature review on psychological and socioeconomic risk indicators. American Journal of Advanced Technology and Engineering Solutions, 4(01), 43–70.

Al-Slehat, Z. A. F., Almanaseer, S. R., Al Sharif, B. M. M., Al-Haraisa, Y. E., Aloshaibat, S. D., & Almahasneh, M. A. (2024). Creditworthiness criteria according to the 5Cs model and credit decision: The moderating role of intellectual capital. International Review of Management and Marketing, 14(6), 274–287.

Bakare, I. A. (2024). Impact of credit record revalidation on consumer credit scores: Implications for lending decisions. International Journal of Research, 5(10), 2125–2136.

Bate’e, M. M., Fachrudin, K. A., & Silalahi, A. S. (2025). A multivariate framework for MSME financial performance: Financial and strategic determinants in developing island economies. Theoretical and Practical Research in Economic Fields, 16(3), 731–745.

Bi, G. B., Ye, W., & Xu, Y. (2024). The impact of information transparency on trade credit: The mediation role of risk. Kybernetes, 53(1), 27–57.

Charfeddine, L., Umlai, M. I., & El-Masri, M. (2024). Impact of financial literacy, perceived access to finance, ICT use, and digitization on credit constraints: Evidence from Qatari MSME importers. Financial Innovation, 10(1), 1–37.

Chirchir, J. K., & Jagongo, A. (2024). Credit appraisal procedure on credit accessibility among small-scale traders in Githurai Market, Kenya. The Strategic Journal of Business & Change Management, 11(4), 1045–1165.

Dasaraju, H., & Tambunan, T. T. (2023). Introduction: Role of MSMEs in achieving SDGs perspectives from emerging economies. In Role of micro, small and medium enterprises in achieving SDGs: Perspectives from emerging economies (pp. 1–16). Singapore: Springer Nature Singapore.

Dey, S., Singh, P. K., & Mhaskar, M. D. (2023). Determinants of institutional agricultural credit access and its linkage with farmer satisfaction in India: A moderated-mediation analysis. Agricultural Finance Review, 83(2), 211–241.

Gustika, R., Rinofah, R., & Maulida, A. (2024). The influence of financial literacy, credit requirements, and financial report quality on access to financing for micro, small and medium enterprises. Jurnal Ilmiah Manajemen Kesatuan, 12(5), 1499–1508.

Gyimah, K. N., Akande, J. O., & Muzindutsi, P. F. (2022). Lending methodologies and SMEs access to finance in Ghana; The mediating role of credit reference information. Cogent Business & Management, 9(1), 75–90.

Islam, S., Khan, S. I., Ashik, A. A. M., Hossain, E., Rahman, M. M., & Rahman, M. S. (2024). Big data in economic recovery: A policy-oriented study on data analytics for crisis management and growth planning. Journal of Computational Analysis and Applications, 33(7), 2349–2367.

Jakob, C. T. (2023). The influence of loan default management practices on the service quality of commercial banks: An empirical study of National Microfinance Bank Limited of Dodoma. Tanzania: University of Dodoma (Master’s thesis).

Joenoes, K. S. H., Sugiyanto, C., Sukamdi, S., & Moeljono, D. (2025). Evaluating microcredit: effects of the 5cs of credit analysis and entrepreneur characteristics on loan performance among MSMEs in Yogyakarta. Asian Journal of Social and Humanities, 3(7), 1400-1419.

Kaveri, V. S. (2024). Financing options for rural MSMEs: An evaluation of regional rural banks. IUP Journal of Bank Management, 23(1), 52–67.

Kowsar, M. M., Mohiuddin, M., & Mohna, H. A. (2023). Credit decision automation in commercial banks: A review of AI and predictive analytics in loan assessment. American Journal of Interdisciplinary Studies, 4(04), 01–26.

Novirin, B. (2025). The effect of applying the eligibility principle in credit distribution to business actors on MSME performance: Case study of MSME actors in Malang City, Indonesia. Majalah Bisnis & IPTEK, 18(1), 68–79.

Nwachukwu, G. (2024). Enhancing credit risk management through revalidation and accuracy in financial data: The impact of credit history assessment on procedural financing. International Journal of Research Publication and Reviews, 5(11), 631–644.

Ofianti, T., Herisman, T. S., & Taofiqurrochman, C. (2025). The influence of credit approval policy through the 5C principle (Character, Capacity, Capital, Collateral, Condition of Economy) on credit asset quality and its implications on NPL (Non-Performing Loan) level PT. BPR YSL Bandung. Eduvest-Journal of Universal Studies, 6(2), 1269–1284.

Oualid, A., Qasmaoui, Y., Balouki, Y., & Moumoun, L. (2025, February). Federated learning and open banking for inclusive credit scoring in Morocco: A systematic review. In International Conference on Intelligent Systems and Digital Applications (pp. 242–256). Cham: Springer Nature Switzerland.

Panjaitan, R., & Siahaan, J. (2025). The role of financial technology and intellectual capital in improving bank performance in the digital era. Jurnal Ilmiah Akuntansi Kesatuan, 13(2), 283–296.

Puryani, A. (2025). Credit control and interest-income reliability in a community microfinance cooperative: Evidence from a kelurahan-level PMK case. Journal of Economics and Business Letters, 5(4), 38–47.

Rai, S. (2024). Insurance literacy, financial inclusion and socioeconomic sustainability among SMEs. Kathmandu: Shanker Dev Campus (Doctoral dissertation).

Rajamani, K., Jan, N. A., Subramani, A. K., & Raj, A. N. (2022). Access to finance: Challenges faced by micro, small, and medium enterprises in India. Engineering Economics, 33(1), 73–85.

Rohmana, L., & Wulandari, P. (2025). The key determinants of digital repayment performance of ultra-micro entrepreneurs in Indonesia microfinance institution. Journal of Entrepreneurship and Public Policy, 14(2), 207–229.

Saifurrahman, A., & Kassim, S. H. (2024). Regulatory issues inhibiting the financial inclusion: A case study among Islamic banks and MSMEs in Indonesia. Qualitative Research in Financial Markets, 16(4), 589–617.

Saputra, R. M., & Darmawan, H. (2023). Effects of urbanization and the growth of micro, small, and medium enterprises (MSMEs) as supports for the economy of Indonesia in an urban context. Journal of Social Political Sciences, 4(2), 201–214.

Sari, L. P., & Karsinah, K. (2022). Determinants of MSMEs access to WIBAWA credit. Efficient: Indonesian Journal of Development Economics, 5(2), 192-203.

Snyder, D. C. (2024). Essays on credit scoring and credit risk data for small and medium enterprise (SME) lending. City: University of London (Doctoral dissertation).

Sondang, M. B. (2025). The impact of bad credit on debtor and creditor accountability in fiduciary-based business financing. Golden Ratio of Finance Management, 5(1), 75–87.

Sukarnasih, D. M., & Bhegawati, D. A. S. (2024). The effect of credit procedures and credit interest rates on the decision to take credit at commercial banks in MSMEs in Bali. Jurnal Akuntansi, Manajemen dan Ilmu Ekonomi (Jasmien), 5(01), 465–472.

Supriadi, I., Maghfiroh, R. U., & Abadi, R. (2025). Implementing innovative credit scoring (ICS) for credit risk assessment and loan origination. The International Journal of Financial Systems, 3(1), 99–112.

Tekola, H., & Gidey, Y. (2019). Contributions of micro, small and medium enterprises (MSMEs) to income generation, employment and GDP: Case study Ethiopia. Journal of Sustainable Development, 12(3), 46–81.

Trivedi, S., Sinha, A., Singh, S. P., & Singh, R. (2024). A study on factors influencing lending decisions for MSMEs by scheduled commercial banks in the CGTSME scheme. The Scientific Temper, 15(02), 2282-2290.

Usanti, T. P., & Setiawati, A. P. (2022). The cooperation between conventional commercial banks and rural banks for financial inclusiveness improvement of small, medium and micro enterprises. IUS POSITUM: Journal of Law Theory and Law Enforcement, 2(1), 16–27.

Wang, J., Bu, K., Li, C., Yuan, Y., Yan, X., Xu, C., ... & Min, X. (2025). Digital platform empowering China-Pakistan Economic Corridor disaster management: Enhancing data integration, resilience, and policy innovation. International Journal of Disaster Risk Science, 16(3), 376–391.

Widyastuti, M., Ferdinand, D. Y. Y., & Hermanto, Y. B. (2023). Strengthening formal credit access and performance through financial literacy and credit terms in micro, small and medium businesses. Journal of Risk and Financial Management, 16(1), 52–62.