Analysis of systems and procedures in distributing people's business credit for MSMEs

Abstract

Purpose: This study examines the distribution system and procedures for People's Business Credit (KUR) to Micro, Small, and Medium Enterprises (MSMEs).

Methods: Utilizing a qualitative approach, data were gathered through interviews, observations, and internet resources.

Findings: The KUR distribution process, which includes a credit application and a thorough 5C analysis (Character, Capacity, Capital, Collateral, Condition of Economy), operates effectively. The bank employs Preventive Control (field observations pre-distribution) and Repressive Control (post-distribution credit usage checks) to promote sound business practices and mitigate risks of defaults.

Practical Implications: The study's practical implications highlight the bank's structured approach to supporting MSMEs, ensuring fund utilization aligns with business goals and thereby fostering local economic growth and stability within the MSME sector.