The Role of Integrative Approach for Enhancing Credit Union Sustainability: A Reflection on The Indonesian Credit Union Movement

Stephanus Eri Kusuma(1*), Antonius Sumarwan(2), Titus Odong Kusumajati(3)

(1) Faculty of Economics, Sanata Dharma University,Yogyakarta, Indonesia
(2) Queensland University of Technology, Brisbane, Australia Faculty of Economics, Sanata Dharma University,Yogyakarta, Indonesia
(3) Faculty of Economics, Sanata Dharma University, Yogyakarta, Indonesia
(*) Corresponding Author

Abstract

Most Indonesian credit unions still focus on providing financial services, paying less attention to the roles of credit unions in education, empowerment and flourishing social solidarity of their members. This condition makes credit unions hardly compete with other microfinance providers in Indonesia. While threatening their sustainability prospect, this condition also reduces the capacity of credit unions to empower their members. Inspired by the maximalist approach and the Ledgerwood’s system framework, we suggest an integrative approach for credit union services that is empowered by the optimization of network collaboration.

Keywords

credit unions, microfinance, sustainability, integrative, network.

Full Text:

PDF

References

Ayadi, R., Keoula, M., De Groen, W. P., Mathlouthi, W., & Sassi, I. (2017). Bank and Credit Union Business Models in the United States.

Bangoura, L. (2012). Microfinance as an Approach to Development in Low Income Countries. Bangladesh Development Studies, 35(4), 87–111.

Biosca, O., Lenton, P., & Mosley, P. (2014). Microfinance Non-Financial Services as a Competitive Advantage: The Mexican Case. Strategic Change, 23, 63–80. https://doi.org/10.1002/jsc

Black, H., & Dugger, R. H. (1981). Credit Union Structure, Growth and Regulatory Problems. The Journal of Finance, 36(2), 529–538.

Hearth, H. M. W. . (2018). Microfinance: Theory and Practice. S. Godage & Brothers (Pvt) Ltd.

Jones, P. A., Money, N., & Swoboda, R. (2017). The Irish Credit Union Business Model: Is it still fit for purpose? A research briefing paper. Centre for Community Finance Europe Ltd..

Kusuma, S. E., & Jaya, W. K. (2015). The Relationship Between Product Diversity and the Performance of Credit Unions and Badan Usaha Kredit Pedesaan in Yogyakarta Special Province. Journal of Indonesian Economy and Business, 30(1), 1. https://doi.org/10.22146/jieb.7330

Kusumajati, T. O. (2012). Faktor Ekonomi Dan Kelembagaan Dalam Keberlanjutan Credit Union Di Indonesia, Unpublished Doctoral Thesis, Gadjah Mada University.

Ledgerwood, J. (1999). Microfinance Handbook: An Institutional Perspective. The World Bank.

Ledgerwood, J. (2013). The New Microfinance Handbook: A financial market system perspective. The World Bank.

Lensink, R., Mersland, R., Vu, N. T. H., & Zamore, S. (2018). Do microfinance institutions benefit from integrating financial and nonfinancial services? Applied Economics, 50(21), 2386–2401. https://doi.org/10.1080/00036846.2017.1397852

Prakash, S., & Malhotra, A. K. (2017). Microfinance-a Comprehensive Review of Literature Microfinance-a Comprehensive Review of Literature. Indian Journal of Economics & Business, 16(September), 121–133.

PSE-KWI. (2019). Rangkuman Pembelajaran dan Rekomendasi Pekan Studi LKM: Credit Union Sebagai Lokomotif Pemberdayaan.

Stowe, D. L., & Stowe, J. D. (2018). Credit union business models. Financial Markets, Institutions and Instruments, 27(5), 169–186. https://doi.org/10.1111/fmii.12102

Strandberg, C. (2017). Social Purpose Credit Union Self-Assessment.

Sumarwan, A., & Taruk, F. R. (2016). Credit Unions as Actors of Social-Economic Empowerment for the Poor and their Impact on Members: A Case Study of the Sauan Sibarrung Credit Union, 2016 International Indonesia Forum Working Paper Series Editors : Christopher A . Woodrich , Frank Dhont , and Guests (2, Issue September). https://doi.org/10.13140/RG.2.2.35171.66089

Tulus, R., & Nerang, M. (2020). Existential challenges of cooperatives and credit unions in Indonesia. In Waking the Asian Pacific Co-Operative Potential. INC. https://doi.org/10.1016/b978-0-12-816666-6.00025-2

Utama, A. P. W. (2019). From Global to Local Initiatives: The Mobility Idea of West Kalimantan Credit unions. Proceedings of the International Conference on Rural Studies in Asia (ICoRSIA 2018), 313. https://doi.org/10.1177/0731121416648936

World Council of Credit Unions-WOCCU. (2003). A Technical Guide to Rural Finance. https://www.woccu.org/documents/rf_techguide

DOI: 10.23917/jep.v23i1.17851

Article Metrics

Abstract view(s): 616 time(s)
PDF: 553 time(s)

Refbacks

  • There are currently no refbacks.