The local wisdom approach in resolving non-performing loans at traditional village credit institution in Bali: a case study during the COVID-19 pandemic
This study explores the role of local wisdom in managing non-performing loans (NPLs) within Village Credit Institutions (VCDs) in Bali during the COVID-19 pandemic. Using a case study approach, the research examines the effectiveness of traditional mechanisms such as awig-awig (customary law) and pa...
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| Format: | Article |
| Language: | English |
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Kharkiv National University of Internal Affairs
2024-09-01
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| Series: | Law and Safety |
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| Online Access: | https://pb.univd.edu.ua/index.php/PB/article/view/833 |
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| author | L. P. R. L. Putri I. N. Nurjaya A. S. K. Dewi |
| author_facet | L. P. R. L. Putri I. N. Nurjaya A. S. K. Dewi |
| author_sort | L. P. R. L. Putri |
| collection | DOAJ |
| description | This study explores the role of local wisdom in managing non-performing loans (NPLs) within Village Credit Institutions (VCDs) in Bali during the COVID-19 pandemic. Using a case study approach, the research examines the effectiveness of traditional mechanisms such as awig-awig (customary law) and pararem (community agreements) in maintaining social cohesion and addressing financial challenges. Through qualitative methods, including in-depth interviews with key stakeholders and document analysis, the study seeks to understand how these customary practices contribute to resolving NPLs. The findings indicate that local wisdom fosters community engagement and dialogue, offering temporary solutions to financial problems during crises. These traditional mechanisms promote a sense of collective responsibility and help maintain social harmony by facilitating discussions between debtors and VCDs. However, the research also highlights several limitations. While effective in the short term, local wisdom struggles to enforce sanctions and provide long-term resolutions, especially during severe economic downturns like the pandemic. This issue is compounded by external factors such as Bali’s heavy reliance on tourism, which makes the local economy highly vulnerable to global disruptions. The lack of digital infrastructure and the absence of integrated government support further intensify the challenges faced by VCDs in managing NPLs.
The study concludes that while local wisdom remains a valuable tool for crisis management, its effectiveness is constrained in times of prolonged financial instability. For VCDs to achieve long-term sustainability and resilience in future crises, it is essential to integrate traditional practices with modern financial systems. Additionally, stronger government support, including digital infrastructure development and comprehensive financial regulations, is crucial to ensure the sustainability of VCDs. This combination of traditional and modern strategies can help VCDs navigate future economic challenges more effectively and safeguard their role in the local economy. |
| format | Article |
| id | doaj-art-cf8fec6cda6346d1b32a1e4e41230bdb |
| institution | OA Journals |
| issn | 1727-1584 2617-2933 |
| language | English |
| publishDate | 2024-09-01 |
| publisher | Kharkiv National University of Internal Affairs |
| record_format | Article |
| series | Law and Safety |
| spelling | doaj-art-cf8fec6cda6346d1b32a1e4e41230bdb2025-08-20T02:20:06ZengKharkiv National University of Internal AffairsLaw and Safety1727-15842617-29332024-09-0194312613610.32631/pb.2024.3.12833The local wisdom approach in resolving non-performing loans at traditional village credit institution in Bali: a case study during the COVID-19 pandemicL. P. R. L. Putri0I. N. Nurjaya1A. S. K. Dewi2Brawijaya University (Malang, East Java)Brawijaya University (Malang, East Java)Brawijaya University (Malang, East Java)This study explores the role of local wisdom in managing non-performing loans (NPLs) within Village Credit Institutions (VCDs) in Bali during the COVID-19 pandemic. Using a case study approach, the research examines the effectiveness of traditional mechanisms such as awig-awig (customary law) and pararem (community agreements) in maintaining social cohesion and addressing financial challenges. Through qualitative methods, including in-depth interviews with key stakeholders and document analysis, the study seeks to understand how these customary practices contribute to resolving NPLs. The findings indicate that local wisdom fosters community engagement and dialogue, offering temporary solutions to financial problems during crises. These traditional mechanisms promote a sense of collective responsibility and help maintain social harmony by facilitating discussions between debtors and VCDs. However, the research also highlights several limitations. While effective in the short term, local wisdom struggles to enforce sanctions and provide long-term resolutions, especially during severe economic downturns like the pandemic. This issue is compounded by external factors such as Bali’s heavy reliance on tourism, which makes the local economy highly vulnerable to global disruptions. The lack of digital infrastructure and the absence of integrated government support further intensify the challenges faced by VCDs in managing NPLs. The study concludes that while local wisdom remains a valuable tool for crisis management, its effectiveness is constrained in times of prolonged financial instability. For VCDs to achieve long-term sustainability and resilience in future crises, it is essential to integrate traditional practices with modern financial systems. Additionally, stronger government support, including digital infrastructure development and comprehensive financial regulations, is crucial to ensure the sustainability of VCDs. This combination of traditional and modern strategies can help VCDs navigate future economic challenges more effectively and safeguard their role in the local economy.https://pb.univd.edu.ua/index.php/PB/article/view/833local wisdomnon-performing loansvillage credit institutionscovid-19balicustomary lawcommunity agreements. |
| spellingShingle | L. P. R. L. Putri I. N. Nurjaya A. S. K. Dewi The local wisdom approach in resolving non-performing loans at traditional village credit institution in Bali: a case study during the COVID-19 pandemic Law and Safety local wisdom non-performing loans village credit institutions covid-19 bali customary law community agreements. |
| title | The local wisdom approach in resolving non-performing loans at traditional village credit institution in Bali: a case study during the COVID-19 pandemic |
| title_full | The local wisdom approach in resolving non-performing loans at traditional village credit institution in Bali: a case study during the COVID-19 pandemic |
| title_fullStr | The local wisdom approach in resolving non-performing loans at traditional village credit institution in Bali: a case study during the COVID-19 pandemic |
| title_full_unstemmed | The local wisdom approach in resolving non-performing loans at traditional village credit institution in Bali: a case study during the COVID-19 pandemic |
| title_short | The local wisdom approach in resolving non-performing loans at traditional village credit institution in Bali: a case study during the COVID-19 pandemic |
| title_sort | local wisdom approach in resolving non performing loans at traditional village credit institution in bali a case study during the covid 19 pandemic |
| topic | local wisdom non-performing loans village credit institutions covid-19 bali customary law community agreements. |
| url | https://pb.univd.edu.ua/index.php/PB/article/view/833 |
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