THE EFFECT OF MICROCREDIT AND EMERGENCY LOAN ON BUSINESS GROWTH IN TIMOR LESTE ECONOMIC GROWTH OF KAEBAUK

Abstract

This study examines the effect of microcredit and emergency loans on business growth in Timor–Leste's economy, specifically in KAEBAUK, from January 2023 to January 2025. Micro, small, and medium enterprises (MSMEs) are important for Timor – Leste economic development, although those Micro, small, and medium enterprise MSMEs are still facing many barriers, such as limited access to finance, insufficient facilities, and low financial literacy. Kaebauk had made an important contribution by providing financial services such as microcredit and emergency loans. A quantitative method was used to collect data from 180 respondents via structured questionnaires and analyze them using SPSS. The data indicate that both Microcredit and emergency loan utilization have considerably improved business growth, as measured through revenue, employment, assets, and repayment. Financial Knowledge increases the successful utilization of these services. Overall, the study shows that having access to credit, combined with financial education, increases the MSME survivability and promotes Timor-Leste's economic growth in general.