The Role Of Credit Cooperatives/Credit Union On Regional Development In Pematangsiantar (Study On Credit Union Cinta Mulia)

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The Role of Credit Cooperatives/Credit Union on Regional Development in Pematangsiantar (Study on Credit Union Cinta Mulia)

Introduction

Cooperatives, as the backbone of the economy, play a vital role in macroeconomic development. Efforts to realize justice, welfare, and increase in income, which is the goal of national development, are inseparable from the role of cooperatives. Credit Cooperatives or Credit Unions (CU) are a form of cooperatives in Indonesia that focus on the development of the community's economy. This study aims to examine the factors that encourage members of CU Cinta Mulia to choose cooperatives as a source of financing compared to other financial institutions, as well as to analyze the role of CU Cinta Mulia in creating employment and encouraging economic activities in the study area.

Background of the Study

CU Cinta Mulia, a pioneer of CU in North Sumatra, has shown rapid development with 14 branch offices, not only in Pematangsiantar but also in Simalungun Regency. Nationally, based on Inkopdit 2011 data, CU Cinta Mulia ranked 17th among all CUs in Indonesia. This study aims to examine the factors that encourage members of CU Cinta Mulia to choose cooperatives as a source of financing compared to other financial institutions, as well as to analyze the role of CU Cinta Mulia in creating employment and encouraging economic activities in the study area.

Methodology

The population of this study is a member of CU Cinta Mulia who has business activities, with a total sample of 60 people. Data was collected through interviews using a questionnaire and analyzed using descriptive methods and t-test test paired with a 95% confidence level.

Factors that Influence Members Choose Cu Cinta Mulia

Research shows several factors that encourage members of CU Cinta Mulia to choose cooperatives as a source of financing, namely:

Accessibility

Cu Cinta Mulia has an extensive branch network in Pematangsiantar and Simalungun, making it easier for members to access services. This accessibility factor is crucial in encouraging members to choose CU Cinta Mulia as a source of financing.

Easier Requirements

Cu Cinta Mulia has easier requirements compared to other financial institutions, such as banks. This factor is also crucial in encouraging members to choose CU Cinta Mulia as a source of financing.

Lower Interest Rates

Loan interest offered by Cu Cinta Mulia is lower than other financial institutions. This factor is also crucial in encouraging members to choose CU Cinta Mulia as a source of financing.

The Principle of Mutual Cooperation

Cu Cinta Mulia is based on the principle of mutual cooperation, so members feel safer and more comfortable in conducting financial transactions. This factor is also crucial in encouraging members to choose CU Cinta Mulia as a source of financing.

The Role of Cu Cinta Mulia in Job Creation

Cu Cinta Mulia opens job opportunities for the surrounding community, both as employees in branch offices and as marketing staff. In addition, Cu Cinta Mulia also encouraged members to open new businesses by providing access to financing and training.

The Role of Cu Cinta Mulia in the Development of Economic Activities

Cu Cinta Mulia provides access to financing for members who want to develop their business, thus encouraging economic growth in the region. CU also provides business training and assistance to members, in order to improve their ability to manage business.

Impact of Cu Cinta Mulia on Increasing Member Revenue

This study shows that the average income of CU Cinta Mulia members increased after joining cooperatives. This is because members can gain easier and cheaper financing access, so they can develop their business and increase income.

Conclusion

Cu Cinta Mulia plays an important role in regional development in Pematangsiantar. In addition to improving the welfare of members, Cu Cinta Mulia also created jobs and encourage economic growth in the region. The role of CU Cinta Mulia shows that cooperatives can be a solution in improving the welfare of the community and encouraging economic development on a sustainable manner.

Recommendations

Based on the findings of this study, the following recommendations are made:

  • The government should provide support and incentives to credit cooperatives and credit unions to encourage their development and growth.
  • Credit cooperatives and credit unions should continue to provide access to financing and training to members to improve their ability to manage business.
  • The government should also provide support and incentives to small and medium-sized enterprises (SMEs) to encourage their growth and development.

Limitations of the Study

This study has several limitations, including:

  • The sample size of the study is relatively small, which may limit the generalizability of the findings.
  • The study only examines the role of CU Cinta Mulia in regional development in Pematangsiantar, and may not be applicable to other regions.
  • The study only examines the factors that encourage members to choose CU Cinta Mulia as a source of financing, and may not be applicable to other financial institutions.

Future Research Directions

Future research should aim to:

  • Examine the role of credit cooperatives and credit unions in regional development in other regions.
  • Examine the factors that influence the growth and development of credit cooperatives and credit unions.
  • Examine the impact of credit cooperatives and credit unions on the welfare of members and the community.

References

  • Inkopdit 2011. Data on Credit Unions in Indonesia.
  • CU Cinta Mulia. Annual Report 2019.
  • World Bank. 2019. Financial Inclusion and Access to Finance in Indonesia.

Appendix

  • Questionnaire used in the study.
  • Data analysis and results.
  • Conclusion and recommendations.
    Frequently Asked Questions (FAQs) about the Role of Credit Cooperatives/Credit Union on Regional Development in Pematangsiantar (Study on Credit Union Cinta Mulia)

Q: What is the role of credit cooperatives/credit unions in regional development?

A: Credit cooperatives/credit unions play a vital role in regional development by providing access to financing, training, and other services to members, which can lead to economic growth and improved welfare of the community.

Q: What is the significance of CU Cinta Mulia in regional development in Pematangsiantar?

A: CU Cinta Mulia is a pioneer of credit unions in North Sumatra and has shown rapid development with 14 branch offices, not only in Pematangsiantar but also in Simalungun Regency. It has played a significant role in improving the welfare of members and creating jobs and encouraging economic growth in the region.

Q: What are the factors that influence members to choose CU Cinta Mulia as a source of financing?

A: Research shows that several factors influence members to choose CU Cinta Mulia as a source of financing, including accessibility, easier requirements, lower interest rates, and the principle of mutual cooperation.

Q: How does CU Cinta Mulia create jobs and encourage economic growth in the region?

A: CU Cinta Mulia creates jobs by opening branch offices and hiring employees, and also encourages economic growth by providing access to financing and training to members to improve their ability to manage business.

Q: What is the impact of CU Cinta Mulia on increasing member revenue?

A: This study shows that the average income of CU Cinta Mulia members increased after joining cooperatives, which is because members can gain easier and cheaper financing access, so they can develop their business and increase income.

Q: What are the limitations of this study?

A: This study has several limitations, including a relatively small sample size, which may limit the generalizability of the findings, and the study only examines the role of CU Cinta Mulia in regional development in Pematangsiantar, and may not be applicable to other regions.

Q: What are the recommendations of this study?

A: Based on the findings of this study, the following recommendations are made:

  • The government should provide support and incentives to credit cooperatives and credit unions to encourage their development and growth.
  • Credit cooperatives and credit unions should continue to provide access to financing and training to members to improve their ability to manage business.
  • The government should also provide support and incentives to small and medium-sized enterprises (SMEs) to encourage their growth and development.

Q: What are the future research directions?

A: Future research should aim to:

  • Examine the role of credit cooperatives and credit unions in regional development in other regions.
  • Examine the factors that influence the growth and development of credit cooperatives and credit unions.
  • Examine the impact of credit cooperatives and credit unions on the welfare of members and the community.

Q: What are the references used in this study?

A: The references used in this study include:

  • Inkopdit 2011. Data on Credit Unions in Indonesia.
  • CU Cinta Mulia. Annual Report 2019.
  • World Bank. 2019. Financial Inclusion and Access to Finance in Indonesia.

Q: What is the appendix of this study?

A: The appendix of this study includes:

  • Questionnaire used in the study.
  • Data analysis and results.
  • Conclusion and recommendations.