Capacity Mapping and Institutional Management Model of Village Owned Enterprises (BUMDes) in North Sumatra

Abstract

This article aims at exploring the challenges of institutional management of BUMDes in North Sumatra and develops an effective BUMDes model management for creating independent professionals of rural economic institutions. It focuses on access, participation, and control on resource management and decision making of BUMDes. This study implied a qualitative approach as action research. Initial data collection techniques included in-deep interviews, case studies, focused group discussions, and observations. Further interventions were followed after initial findings and joint evaluation of BUMDes institutions. The research informants consisted of Community Empowerment Agencies, heads of the village, BUMDes institutions, NGOs, and local communities as beneficiaries in Dairi and Langkat regencies. The study reveals BUMDes in North Sumatra still lack of professionalism and sense of belonging in managing and developing rural community economic development. This is due to BUMDes in North Sumatra ignorance on institutional management in regulation, professional form of business, administration, reporting and accountability, capital, and assets, as well an impact to public and village. Furthermore, local authorities considered the existence of BUMDes as merely project oriented miniature for the villages which were yet to be based on data and actual need of villagers, thus, failed to contribute to the empowerment and welfare of the villages. This study suggests the urgency of increasing awareness, capacity, and institutional commitment of BUMDes to integrate organizations and improve collaboration between actors as the key to increase the achievement of BUMDes in running its business more effectively.