Weekly Featured Article

Gotong Royong as Social Capital to Overcome Micro and Small Enterprises’ Capital Difficulties

Kukuh Lukiyanto (1), Maranatha Wijayaningtyas (2)

(1) Entrepreneurship Department, Bina Nusantara University, Malang Campus, Indonesia
(2) Civil Engineering Program, National Institute of Technology Malang, Indonesia

One of the micro and small enterprises’ (MSEs) main problem is business capital. Cash flow shortage often interrupts business development. This difficulty is due to the limited ability in meeting the requirements to access sources of capital. The development of micro and small enterprises using the culture of the local community is a way to overcome this issue. Asians generally have the perception of Gotong Royong (which means ‘mutual aid’ in English) as a form of collectivism. This study comes from the gap whether Gotong Royong serves as social capital to overcome the difficulties of micro and small enterprises’ capital. Therefore, the purpose of this study is to find out the perception of owners of MSEs toward the application of Gotong Royong culture, which suggests how to overcome the business capital difficulties in reality. The qualitative method was applied to investigate the informants with triangulation process to validate the result accuracy. The results of this study show that MSEs owners build their businesses with the family culture, which upholds a Gotong Royong character. Small: based on the field data processing, the second result reveals that the social capital of the community in the form of Gotong Royong culture could overcome capital constraints in micro and small enterprises. Similarly, the Gotong Royong culture applied in business could reduce the capital requirement that should be prepared by micro and small entrepreneurs. The contribution of this research is for business owners so that they do not lose the character of mutual cooperation and to provide input for the government to support family businesses that still rely on these characters by giving light funding assistance. However, this research must be developed further in a broader business scale with different informant profiles so that the results will be more comprehensive.

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https://doi.org/10.1016/j.heliyon.2020.e04879
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