BUMDes Business Sustainability, Establishment of Merah Putih Village Cooperative, and Fraud Tendency with Strengthening Innovation and Community Governance
- AIOR Admin
- 24 hours ago
- 1 min read
Sri Ambarwati, Syahril Djaddang, Tri Astuti
Universitas Pancasila, Indonesia
The sustainability of village-owned enterprises (BUMDes) remains a topic of discussion in various scientific forums. A decade after their establishment, and amid numerous challenges, data from the Indonesian Ministry of Villages shows that 32,249 BUMDes operate across 74,957 villages in Indonesia. According to Article 2, Paragraph 1 of the Minister of Home Affairs Regulation No. 37 of 2007 concerning Financial Management Guidelines, BUMDes are required to manage their capital in a transparent and accountable manner. However, despite the rapid growth of BUMDes, cases of fraudulent practices have been reported during their implementation. The governance of BUMDes in this study adopts a community governance approach, formulated by considering the unique characteristics of BUMDes that distinguish them from profit-oriented corporations, as BUMDes function as social enterprises with both social and economic missions. The progress of BUMDes depends on their level of sustainability, while the threat of fraud can undermine their long-term viability. Sustainability indicators for BUMDes include stable or continuously increasing assets, expanding business networks, broader consumer reach, the ability to develop diverse products and business units, and the capacity to establish mutually beneficial partnerships with external parties. Innovation plays a crucial role in enhancing BUMDes’ sustainability, as it can stimulate niche demand for community-based products that address environmental sustainability issues and strengthen BUMDes’ reputation for environmental stewardship originating at the village level.
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