The Saving and Loan Coopratives Model In Indonesia ISBN: 978-974-231-888-8

THE SAVING AND LOAN COOPERATIVES MODEL IN INDONESIA
Ahmad Subagyo
STIE GICI Business School, Indonesia

ABSTRACT

Cooperatives have played a significant role especially for the poor people in the Micro, Small, and Medium sized Enterprises (MSMEs). Saving and Loan cooperatives in Indonesia have been in existence since the Dutch colonization in the 19th century to provide alternative financial services for the poor and needy people to help themselves. The purpose of this study is to (1) describe the current practices of saving and loan cooperatives in Indonesia (2) review the patterns and the common themes in the current practices to classify them into several business models; (3) make the list of the participants and stakeholders related to saving and loan cooperatives in Indonesia; (4) map the positioning of saving and loan cooperatives in the landscape of microfinance institutions in Indonesia. Seven business saving and loan cooperative models are highlighted in this study, namely – Credit Union, Quasi Credit Union, Quasi Bank, Joint Liability (Group Lending), Sharia-based Cooperative, Saving and Loan Unit, and Partnership. This study applied comprehensive methodology approaches including case studies (qualitative method) and surveys (quantitative method). All the seven featured cooperatives have developed some type of supervision and reporting procedures. In general, policy making is done through Annual Members Meeting (RAT) with a representation system, while operational decisions are made by operational staff in consultation with Management Board, and Supervisory Board. The study found that all the seven cooperatives promote transparency and accountability in their profit sharing policies.

Keywords: Credit Union, Quasi Credit Union, Quasi Bank, Joint Liability (Group Lending), Sharia-based Cooperative, Saving and Loan Unit, Partnership, Micro, Small and Medium Enterprises (MSMEs). Annual Members Meeting (RAT)

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