<![CDATA[Limited access to bank credit remains a major obstacle for Micro, Small, and Medium Enterprises (MSMEs), primarily due to their inability to meet procedural requirements and provide adequate collateral. In response, Law No. 1 of 2016 concerning Guarantees emphasizes the need to support the business sector, especially MSMEs, in overcoming financing constraints. This study aims to examine the effect of the Capital Adequacy Ratio (CAR), Net Interest Margin (NIM), and Bank Size on the effectiveness of MSME credit distribution by Conventional Commercial Banks in Jambi Province during the 2018–2020 period. This research employs a quantitative approach using secondary data obtained from financial statements. The independent variables include CAR, NIM, and Bank Size, while the dependent variable is the percentage of MSME loan distribution. Data were analyzed using descriptive statistics and inferential statistical methods through Structural Equation Modeling (SEM) with the Partial Least Square (PLS) approach. The population comprises Conventional Commercial Banks operating in Jambi Province, selected using a purposive sampling method. The results indicate that both partially and simultaneously, CAR, NIM, and Bank Size significantly influence the effectiveness of MSME loan distribution. These findings highlight the importance of banking institutions in enhancing inclusive financial intermediation through financial literacy initiatives and responsive financing strategies tailored to the needs of MSMEs.]]>
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