Analysis of COVID-19 Impact on Micro, Small, and Medium Enterprises (MSMEs) Credit Distribution in East Java Banks

Research aims: The purpose of this study was to determine the credit distribution level used as working capital assistance for Micro, Small, and Medium Enterprises (MSMEs) during COVID-19 pandemic.Design/Methodology/Approach: This a sample 8 cities/regencies in East Java. Meanwhile, recipients were population areas. research's analysis model panel data regression (generalized least square) by considering emergence heteroscedasticity cross-section between regional objects. control variables outside BI rate, third-party funds (TPF), inflation.Research findings: study’s results showed that pandemic had significant negative impact only on medium-sized business loans, while micro small loans are more resilient. Besides, significantly positively influenced TPF; inflation did not affect credit; rate negatively affected credit.Theoretical contribution/Originality: Studies credit-related economic phenomena monetary policy have been widely carried out. However, catastrophic virus causes long-term uncertainty impacts banks still requires in-depth study. Also, employed GLS considers heteroscedasticity, which is rarely previous studies.Practitioner/Policy implication: research can be essential information Indonesian Financial Services Authority (Otoritas Jasa Keuangan or OJK) Bank Indonesia (BI) policymaking, both regulatory aspects bank liquidity provision, stimulating credit, especially era.Research limitation/implication: classified based micro, medium. It grouped sector various cities regencies has clustered spatial concentration recipient