LIQUIDITY MANAGEMENT AND ITS IMPACT ON THE GROWTH OF SMALL AND MEDIUM ENTERPRISES (SMES) IN INDONESIA
Keywords:
Liquidity Management, SME Growth, IndonesiaAbstract
This research aims to examine liquidity management and its impact on the growth of Small and Medium Enterprises (SMEs) in Indonesia through a literature review method. Liquidity management is a crucial factor in maintaining financial stability and supporting the growth of SMEs amidst the financial challenges they often face. This literature review includes analysis from various secondary sources such as scientific journals, research reports, articles and relevant books. The results of the study show that thorough financial planning, regular cash flow monitoring, and efficient management of receivables and payables greatly influence the liquidity capabilities of SMEs. Adequate cash reserves enable SMEs to overcome emergency situations and respond quickly to market changes. In addition, the use of financial technology (fintech) has been proven to increase efficiency in financial management and provide easier access to financing sources. Continuous education and training regarding financial management for SMEs was also found to be an important factor that supports better liquidity management. Governments and financial institutions play an important role in providing the educational programs and resources needed by SMEs. Overall, this literature review confirms that good liquidity management has a significant positive impact on the growth of SMEs in Indonesia. Implementing effective liquidity management practices can increase financial stability and support business expansion, so that the contribution of SMEs to the national economy can be more optimal.
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