Hybrid Funding Innovation Based on Debt and Equity Collaboration for MSME Funding in North Sumatera

Abstract

Micro, small, and medium enterprises (MSMEs) in North Sumatera face
persistent financing constraints that limit their contribution to regional economic
competitiveness. Despite the proliferation of peer-to-peer (P2P) lending and
securities crowdfunding platforms, pure debt and pure equity models exhibit
structural limitations: P2P lending suffers from high default risk and information
asymmetry, while equity crowdfunding imposes excessive dilution costs and
valuation challenges for early-stage MSMEs. This conceptual paper proposes a
hybrid debt-equity funding model that integrates complementary financing
instruments through digital platforms, addressing these limitations by optimizing
risk allocation, reducing information frictions, and matching investor preferences
to firm lifecycle stages. Grounded in Capital Structure Theory, Financial
Intermediation Theory, Information Asymmetry frameworks, and Agency
Theory, the model demonstrates theoretical superiority over single-instrument
approaches. North Sumatera serves as a critical testing ground due to its
substantial MSME sector (contributing 57.8% to regional GDP), documented
capital access barriers (only 15.2% of MSMEs receive bank loans), and
supportive regulatory environment under Indonesia's OJK fintech framework.
Through conceptual development and policy analysis, this study presents a
theoretically robust framework, comparative performance analysis, and
implementation roadmap. The hybrid model offers a scalable solution to bridge
the MSME financing gap in emerging markets, with implications for financial
inclusion policy and platform governance