ISBN : 978-602-60736-9-3 639 IDENTIFICATION OF SMALL AND MEDIUM HIGHLIGHTED FUEL DEVELOPER FACTORS Titi Darmi 1 University of Muhammadiyah Bengkulu titi.harmadi@gmail.com Agussalim M 2 Universitas Ekasakti, Padang. agussikki@yahoo.com ABSTRACT Development and growth of Small and Medium Enterprises (SMEs) is one of the motor of economic growth. The development of SMEs in West Sumatera until 2014 is 1.2 million people and the most engaged in services, especially types of food and beverage products. Most of these SMEs are generally unsustainable. The purpose of this research is to know the inhibiting factor of small and medium enterprise development in West Sumatera. The research method uses a qualitative approach, primary data source (interview, observation and observation), secondary data (relevant agency reports, laws, documents, literature and records related to the research topic). Data analysis through data collection, data condensation, data presentation and decision making or data verification. The results showed that the problems faced by small and medium enterprises in West Sumatra include: 1) marketing; 2) capital and funding; 3) innovation and utilization of information technology; 4) employment absorption and empowerment; 5) business development plan; And 6) readiness to face external environmental challenges. Keywords: Small and Medium Enterprises, Inhibiting Factors and West Sumatra I. INTRODUCTION In Indonesia, SME has historically been a major player in domestic economic activities. Micro, Small and Medium Enterprises (SMEs) is a business built by the community and until now SMEs continue to grow and begin to strengthen the economy in Indonesia. Even the SME sector has been promoted and made as the main agenda of Indonesia's economic development. During the economic crisis of 1998, the SME sector has proved resilient and able to survive amid the collapse of the economy, while the larger industries are actually being hit by the crisis. Small and Medium Enterprises play a major role as employment and primary resource generators or secondary income generators for households. On the other hand, as a group that has become an important driving force for economic development and local communities (Tambunan, 2009). Mudradjad Kuncoro in Bisnis Indonesia Daily on October 21, 2008 suggested that Small and Medium Enterprises proved resilient to the crisis and able to survive because, firstly, no foreign debt. Secondly, there is not much debt to the banks because they are considered unbankable. Third, use local input. Fourth, export- oriented. The rapid development of Small and Medium Enterprises has become the focus for the government to empower the people's economy, and at the same time become the source of income of most people in improving their welfare. Mulyanto (2008) argues that Indonesia's economic wheels can move little by little because of its existence. According to Radhi (2008) in the populist economic system, the development of rural industries through micro, small and medium enterprises (SMEs) is a strategic step in the nation's economic development. Not only central government, even local governments continue to improve economic development in the small and Medium as well as West Sumatra. The experience during the economic crisis has signaled that small and medium enterprises supported by local (mainly) local resources, especially in agriculture and small industries that have resistance to the effects of the economic crisis, are relatively able to survive compared to large-scale enterprises using material components The head of West Sumatera Industry and Trade Office Afriyadi Laudin in Minangkabau News (2014) said that small and medium businesses in West Sumatra each year 1 Titi Darmi, M.Si. Lecturer, Faculty of Social Science and Political Science, University of Muhammadiyah Bengkulu. Street. Bali Bengkulu City, telephone +62736-22765, HP +85234332266. titi.harmadi@gmail.com/titidarmi@umb.ac.id 2 Dr. Agussalim M, SE, M.Si. Lecturer, Management Study Program of Economic Faculty, Ekasakti University Fakultas Ekonomi, Universitas Ekasakti, Padang. Street. Veteran Dalam Number 26, Padang, Sumatera Barat, Indonesia, 25113. agussikki@yahoo.com