The Effect of Good Corporate Governance and Local Culture Values on The Performance of Village Credit Institutions

Abstract

Lembaga Perkreditan Desa (LPD) is one of the elements of village institutions that performs the functions of traditional village finance to manage the potential of traditional village finance. In Balinese context, LPD is a financial institution adapted to the concept of community in Bali. LPD has the potential and proven capable of advancing the welfare of the village community as well as meeting the needs of the village concerned. The number of LPDs currently in Bali are 1433 LPDs. This study aims to investigate the effect of Good Corporate Governance and Tri Hita Karana as a Balinese local culture toward the performance of Village Credit Institutions (LPDs). The data in this study were collected using questionnaires that were distributed directly to the LPDs in Denpasar area. The technical analysis used in this study is multiple linear regression and t (t-test) for partial analysis. Based on the results of multiple linear regression analysis, the regression equation Y = 20,783 + 0,157X1 + 0,516X2 is obtained. The t-test analysis from the regression results shows that Good Corporate Governance and Tri Hita Karana have a significant effect on LPD’s performances.

Keywords: Good Corporate Governance, Tri Hita Karana, LPD performances

DOI: 10.7176/EJBM/12-24-11

Publication date:August 31^st 2020