This document discusses financing for credit union development. It outlines several problems faced by many credit unions in Indonesia, including insufficient provisions for delinquent loans, poor asset quality from high percentages of delinquent loans, and low net institutional capital. The document proposes both reactive and proactive approaches to address these issues. A proactive approach involves implementing a quality management system to develop sustainable credit unions by focusing on areas like leadership, planning, support, operations, financial counseling, training, product development, and performance evaluation. The goal is to help credit unions better manage their finances and resources to support members' development.

1. FINANCING FOR
CREDIT UNION DEVELOPMENT
FX Budi Widyatmoko (fxbudiw@yahoo.com)

3. Money

Is just a good

Things that acts as a medium of exchange

Can be cash,

Can be intangible like amount in bank account

Useful things
… but money by itself doesn't do the trick

4. Financing for development

The whole dicipline, art and science of
managing money .

Collect money, hold, invest them

Disburse money for development purposes

Providing money, money flowing

Contribution to educate members

Use every last rupiah available as effective as
we possibly we can.

5. Credit union has a significant role in rise up people wealth
creation and can have a significan role in SDG

6. Problem :
There so many credit unions in Indonesia
that can indicate a sustain credit union.

No sufficient provision for delinquency loan
(NPL).

Poor Asset Quality indicate by percentage
delinquency loan with total loan.

Poor Nett Institutional Capital

7. A Sustain credit union should fulfiled 86 indicators
Provision for P1 = 100 %
Delinquency Loan < 5 % of Total Loan
Net Institutional Capital > 10 % of Total Asset

8. The Solution is like try to make
a big picture of jigsaw puzzle

9. 2 Way Approach Solution :

Reactive Approach :

Proactive Approach

10. Reactive Approach :
1. Analize Financial Report
2. Search and Find the
delinquent loans to pay
their debts.

11. Reactive approach :
… like driving a sophisticated car by viewing rear
mirror...

12. Proactive approach :
A SUSTAIN CREDIT UNION
A sustain Credit union
like gilded torch of
Indonesian
National Monument

13. Quality Management System to
develop credit union

14. Social Equity
Social equity should taking care.
Becarefull with roumour, black campain or make
disapoint the key person or informal leader
Better get pain in pllanning in social equity than
feel the pain of regret.
Social problem can impact to finacial problem in
only couple of weeks.

15. Leadership
Board of Director shall demonstrate leadership
and commitment by taking accountability for the
effectivenes of credit union system by ensuring
implementation and communicate of strategic
direction, policy, objective, integration business
processes and focus to member.

16. Planning
Credit union shall plan action to address risks and
opportunity .
Credit union shall establish objectives and
planning to achieve them.
(what will be done, what resources will be
required, who will be responsible, when will be
completed and how the results will be
evaluated)

17. Support
Credit union shall determine and provide
resources needed such as people,
Infrastructure, environment for the operation of
processes, monitoring and measuring resources
and organizational knowledge, competence,
awareness, communication and documented
information.

18. Operation planning and control
Credit union shall plan, implement and control the
processes needed to meet the requirement the
provision of products and services and to
implement the actions.
Credit union has to be as effectively as possible
then is to tailor the finance itself specifically to
the need using all those instruments.
Credit union has to match the financial instrument
to its specific use.

19. Financial Counseling
1. The need to productive living
2. Current Financial Condition
3. We should know the limit of the
capacity of the borrower.
4. Term of payment.
5. IOB payment
6. Finding root cause why delinquent
loan can be happened
7. Reschedulling the loan

20. Survey fo member borrower
Capacity to repay the loan should be pinpointed
with larger score than the others in analize 5 c.

21. Credit union basic members
awareness and competency

Credit union philosophy, principles and value

Hard working

Saving habit/living frugal

Only borrow for productive activity and wealth
rising

Pre membership seminar

22. Training,Competency and
awareness
Smart spending based financial literacy ,
especially for woman, will also help the whealth of
the family because financial literate woman will
find ways to make their own kids and each other
be more productive as they grow up.

23. Design and development of product
and services
Before launching a new product or service should
be considered target market, interest rate
minimum opening deposit, (none very low, high
higher and high highest), minimum balanced
requrement, atomatic roll over, withdrawal
policy, promotion.

24. Control of externally provided
products and services
Credit union should ensure that externally
provided processes, product and service
conform to the requirements.

25. Performance Evaluation
Credit union shall do :
Monitoring, measurement, analysis and
evaluation
Internal audit
Management Review
At periodic time.

26. Improvement
Credit union shall determine and select
opportunities for improvement and implement
any necessary action to meet member
requirement and enhance member/customer
satisfaction

27. Recomendation

Inkopdit/ CUCO Indonesia should endorse
implementation of quality management system
in every Puskopdit and credit union.

Access / QMS technical team to support credit
union should be prepared

Puskopdit/Secondary tier credit union should
have a supporting team for QMS or ACCESS
implementation.