The Effect of Internal and External Environment of Banks Local Peoples Rights on the Effectiveness and Performance of Rural Bank in the East Java Economic Growth

Author(s)

Afandi Haris Setyo Nugroho , Tri Ratnawati , Slamet Riyadi ,

Download Full PDF Pages: 43-50 | Views: 774 | Downloads: 226 | DOI: 10.5281/zenodo.4922270

Volume 9 - March 2020 (03)

Abstract

This study aims to determine the influence of the internal and external environment of rural banks owned by local governments and their impact on the welfare of the people in East Java. The population is the village community of 5 Rural Credit Banks owned by the regional government that channeled village fund allocations in East Java. Using the SEM rule, the number of samples is 250 respondents. The results showed that: 1). The internal environment influences the effectiveness, performance of rural banks, and 3). The internal environment has a negative effect on rural economic growth. 2). The external environment affects the effectiveness, performance of rural banks, and rural economic growth. 7). The effectiveness of rural banks affects the performance of rural banks. 3). The effectiveness of rural banks affects the welfare of rural communities, community economic growth, and community welfare. 4). Village economic growth affects the welfare of the community. 5). The welfare of village communities after the government channeled village funds through rural banks in East Java increased, this is evidenced by the improved living conditions of the community, where villagers now have savings, and each villager has a semi-permanent residence. Suggestions to rural banks, to always improve their performance by increasing the number of village funds distributed annually; Increase the number of villages that are rural bank partners; and improving the ability of rural banks to collect village funds from the government. Further research is recommended to increase the scope of research, taking into account all districts in East Java.

Keywords

internal environment, external environment, rural bank effectiveness, rural bank performance, rural economic growth, community welfare.

References

i.        Anugerah, Gusti Afrilianto (2017) Analysis of the Impact of Village Fund Allocation on Economic Growth in Bogor Regency, Economic Journal of the Department of Economics Faculty of Economics and Management Bogor. Bogor Agricultural University, 2017

ii.       Bagus, Qomaruzzaman Ratu Edi and Syamsul, Had (2016) The Effectiveness of People's Credit Banks in the Framework of Building a Community-Based Economy in Rural Areas, Jember: Muhammadiyah University, Jember

iii.      Creswell, John W. and Vicki L. Plano Clark (2018) Design and implement mixed methods research. 2nd edition. Indonesian edition. Jakarta: Student Library.

iv.      Drucker, Peter F (2005) Innovation and Entrepreneurship Practice and Principles, New York, Harper & Row, Publiser, Inc.

v.       Dianti, Lalira, Amran T. Nakoko, Ita Pingkan F. Rorong (2018) The Effect of Village Funds and Village Fund Allocation on the Poverty Rate in Gemeh Subdistrict, Talaud Islands Regency, Journal of Scientific Periodical Efficiency Volume 18 No. 04 of 2018: 62-72

vi.      Erni, Panca Kurniasih (2017) Effect of economic growth on income inequality, labor absorption, and welfare, Economic Journal of Emerging Markets, 9 (2) October 2017,181-188.

vii.     Fahmi, Irham (2015) Introduction to Financial Management Theories and Questions. Bandung: Alfabeta.

viii.    Gustaman, Ria (2000) The Socio-Economic Factors of the Tarn Society that Affect Credit Repayment (Case of Rice Farming Business Credit in West Java), Bandung Dissertation, Postgraduate Program at Padjadjaran University, Bandung

ix.      Hitt, Michael A., Ireland, R. Duane and Hoskisson, Robert E (2011) Strategic Management: Competitiveness and Globalization, Indonesian Edition, Jakarta, Salemba Empat.

x.       Indria Widyastuti, and Dewi, Yuliandari (2016) Analysis of the Role of Rural Banks in Improving Micro Small Business Performance (UMK), Journal of Information Management, AMIK BSI Bekasi: 1-18

xi.      Kurniawan, Agung (2015) Transforming Public Services, Jakarta: Kencana

xii.     Laksmono, R. Didik (2014) Alternative Pattern of Credit Guarantee, One of the Efforts to Increase Accessibility of Micro and Small Micro Enterprises towards Banking Loans, Bank Indonesia, Jakarta

xiii.    Mirza (2011) The Influence of External and Internal Environments on Competitive Strategies and Partnership Strategies and Their Impact on Competitive Advantage and Its Implications on the Performance of Small and Medium Industries in West Sumatra, Indonesian. Journal of Economics and Business, Vol 1, No 3 (2011).

xiv.    Munizu, Musran (2010) The Effect of External and Internal Factors on the Performance of Micro and Small Enterprises (MSEs) in South Sulawesi, Journal of Management and Entrepreneurship, Vol. 12, No. March 1, 2010: 33-41.

xv.     Moeheriono (2014) Competency Based Performance Measurement, Revised Edition. Jakarta: Rajawali Press.

xvi.    Nasikun (2007) Indonesian Social System, Jakarta: Raja Grafindo Persada.

xv.     Novita Wahyu Setyowati (2015) The Effect of External and Internal Environments on Competitive Advantages in Small and Medium Industries in Bandung, West Java, E S E N I I Journal of Business and Management, Vol. 5, No. 1, April 2015

xvi.    Nurlina, Nlp. Ria, N. Suparta, N. Sutjipta (2013) Internal Environment, External Environment, and the Secret of the Entrepreneurial Soul as the Foundation for Differentiation Strategies, and Their Effects on Competitive Advantages of Ornamental Plant Micro Businesses in Denpasar City, Journal of Agribusiness Management Vol. 1, No. October 2nd, 2013

xvii.   Ontorael, Rizal, Suhadak, Mawardi Mukhammad Kholid (2017) Analysis Of The Influence Of External And Internal Environmental Factors On Business Performance: A Study On Micro Small And Medium Enterprises (MSMES) Of Food And Beverage, RJOAS, 6 (66), June 2017

xviii.  Putu, Rani Susanthi (2017) Analysis of Internal and External Environments in Achieving Company Goals (Case Study of Stie Galileo Batam), Journal of ElectornicREKAMAN (Economic Research in Management and Accounting) Galileo College of Economics, Vol. 1 No. November 1, 2017.

xix.    Ratna, Sari Dewia, Ova, Novi Irama (2018) The Effect of Village Fund Allocation on Poverty: Case Study in North Sumatra Province, Journal of Accounting and Business, 4 (2) November 2018

xx.     Rusydi, H. Muhammad (2012) The Effect of Village Fund Allocation (Add) on the Welfare of Village Communities in Takalar District, Faculty of Economics, Unismuh Makassar, Journal of Economic Balance Volume 8 No. December 2, 2012, 152-176

xxi.    Sofyan, Indris, and Ina, Primiana (2015) Internal and External Environment Analysis on the Performance of Indonesian Small and Medium Industries (SMES), International Journal of Scientific & Technology Research Volume 4, Issue 04, April 2015.188-196.

xxii.   Suryaningrat, Bayu (2015) Village and Village Administration Government. Jakarta: New Script.

xxiii.  Tan, JJ and Litschert, R.J (1994) Environment-Strategy Relationships and its Performance Implications: An Emperical Study of the Chinese Electronics Industry, Strategic Management Journal, Vol. 15, pp. 1-29

xxiv.  Wheelen, Thomas L., Hunger, J. David (2010) Strategic Management and Business Policy Achieving Sustainability. Twelfth Edition. USA: Pearson.

Cite this Article: