FROM CAPITAL TO CAPABILITY: THE MEDIATING ROLE OF ENTREPRENEURIAL TRAINING IN ENHANCING ECONOMIC WELL-BEING AMONG MICRO-ENTREPRENEURS

Author: Andhika Puspa Ningrum 

ABSTRACT

Micro-enterprises play a vital role in promoting inclusive economic growth and poverty reduction. However, limited access to financial resources and inadequate entrepreneurial capabilities often constrain business sustainability and welfare improvement. This study examines the effects of microcredit provision and business mentoring on economic well-being, with entrepreneurial training serving as a mediating variable. A quantitative explanatory approach was employed using survey data collected from 90 participants of the PT PNM Mekaar Program in Palembang, Indonesia. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The findings indicate that microcredit provision and business mentoring significantly influence entrepreneurial training. Furthermore, microcredit, mentoring, and entrepreneurial training each exert positive and significant effects on economic well-being. Entrepreneurial training emerged as the strongest predictor of economic well-being and partially mediated the relationships between microcredit and economic well-being as well as between mentoring and economic well-being. The results suggest that sustainable welfare improvement requires not only financial access but also capability-building interventions. Integrating financing, mentoring, and entrepreneurial training can strengthen the effectiveness of microfinance programs and enhance the economic well-being of low-income entrepreneurs.

Keywords: microcredit; mentoring; entrepreneurial training; economic well-being; financial inclusion; microfinance.

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