Social Capital Based: Case Study on The Teacher Cooperative North Payakumbuh, West Sumatera, Indonesia

Abstract

The perpetrators of farming in rural areas in general are still faced with the classic problem of the limited availability of capital, capital constraints may limit the space for agricultural activities in the rural sector (Hamid, 1986).  According Martowijoyo (2005) the weak performance of financial institutions as financial intermidiasi institutions can be viewed from three aspects: (1) low levels of loan repayment; (2) low morality of the implementing agency, and (3) low level of mobilization of public funds. The weaknesses of keberlansungan life has consequences for financial institutions that have been established after the program is completed. As a result, program participants generally will again experience a shortage of capital.

One of the financial institutions that can be exploited and encouraged to finance micro segment is a cooperative that included one of the Formal Financial Institutions (LKF). One of the cooperative who have been helped are poor is the official cooperation of the Republic of Indonesia-North Payakumbuh Teachers  (KPRI-GPU). The cooperative was founded by the union of North Payakumbuh teachers based on trust (social capital), and the presence KPRI-GPU proved to be welfare for teachers in particular and other small farming communities.

Fukuyama (2002) argues that social capital, focused on the importance of relationships in economic affairs. Furthermore it is said that companies, industries, regional, and national economies can function more efficiently if there is respect for one another (mutually respectful) and the relationship of trust (trusting relationship) between citizens.