Philippine E-Journals

Relational Benefits Analysis of Credit-Delivering Services for Small and Medium Enterprises in Indonesia

Tatik Suryani | Iramani Iramani | Basuki Rachmad

 

Abstract:

Relationship marketing is one of key success factors for maintaining customers for the long term, and for establishing business competitive advantage. In the delivery of credit to small and medium enterprises (SMEs), banks need to build relationships with the SME clients. To formulate effective marketing strategies in credit services, banks should know the SMEs preferences in terms of relational benefits. The objective of this study is to explore the relational benefits sought by the SME clients from the banks as these SMEs apply credit for developing their business. In Indonesia, SMEs are located in three different regions. Another objective is to determine the differences among the three regions in terms of the relational benefits sought. A total of 265 entrepreneurs from three regions participated in the survey. The factor analysis results show consistency with the previous studies. The 15-item scale yield three benefit factors sought by SMEs including: confidence benefits (50, 46 %), social benefits (11, 16%), and special treatment benefits (7, 87%). The variance analysis show significant differences in the three benefit factors sought by SMEs across the regions. This suggests that banks’ delivery of credit services to SME should consider these differences.