Identification of Credit Risk Management, Market Value and Their Interrelationship Using MICMACTOR Analysis

Abstract

Credit risk management is currently a priority for microfinance institutions. Credit risk management also pays attention to market value as a credit institution's competitiveness and entrepreneurial spirit to realize company performance. The aim of this research is to identify key variables (CRM) through systematic literature. Next, try to create problem solving related to CRM variables and the relationships between variables using MICACTOR Analysis to form an Interpretive Structural Model (ISM). The research method used a qualitative approach. Data was collected from primary data through in-depth interviews and questionnaire instruments. The research results show that cooperative credit risk management is determined by strong relationships in financial management. Financial management in handling cooperative credit risk is strongly correlated with performance evaluation and accountability as well as market value, while entrepreneurial spirit has a weak relationship in managing credit risk in urban cooperatives. Recommendations for further research require a study of financial management and credit risk assessment on a technopreneur basis in credit cooperatives. The practical implication of the research results is that the ability to manage credit risk in microfinance institutions is able to create performance and accountability and company market value, but has not maximized the entrepreneurial spirit which has the potential to create income opportunities. The others practical implications the ability to manage credit risk in urban savings and credit cooperatives has a strong inter-relationship effect on the ability of market value competitiveness and individual innovation as business managers of non-bank financial institutions.

Keywords: MICMACTOR Analysis, Credit Risk Management, Market Value, Entrepreneurial Spirit

JEL Code: M2, M21, D910

Orcid Number: 0000-0002-9870-2216

DOI: 10.7176/JESD/14-16-01

Publication date: October 2023