The Effect of the Effectiveness of People’s Business Loans (KUR) Distribution on Traders’ Welfare Through Increased Working Capital in Traditional Markets in Tasikmalaya City

Abstract

This study aims to analyze the effect of the effectiveness of People’s Business Credit (KUR) distribution on the welfare of traditional market vendors through working capital as an intervening variable in Tasikmalaya City. The study employed a quantitative approach with an explanatory design. Data were collected via a Likert-scale questionnaire administered to 225 traditional market vendors who received KUR and analyzed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). The effectiveness of KUR distribution scored an average of 3.25 with an index of 65.05%; working capital scored 3.21 with an index of 64.19%; and well-being scored 3.21 with an index of 64.27%, all falling into the “moderate” category. The path coefficient for the effect of KUR effectiveness on working capital was 0.874, that for working capital on welfare was 0.887, and the direct effect of KUR effectiveness on welfare was 0.105. The indirect effect via working capital was 0.775, the total effect was 0.880, and the VAF was 88.1%. The model explains 76.3% of the variation in working capital and 96.0% of the variation in welfare. These results indicate that working capital is the dominant mediating mechanism. However, the bootstrapping outputs—including the t-statistic, p-value, and confidence interval—are not available in the source, so statistical significance and the decision regarding hypothesis acceptance cannot yet be determined. Discriminant validity has also not been met, so the structural results must be interpreted with caution