OPTIMIZATION OF VILLAGE-OWNED ENTERPRISES TO INCREASE VILLAGE ECONOMIC STRENGTH

Abstract

The village is the foremost government agent, if every village is prosperous then this is an indicator of a country's success. The country's goals will be achieved if development starts from the village. Optimizing the potential of the village will increase the economic strength of the village which in turn will increase the regional / state economy. Each village has a different potential, but only a few villages succeeded in exploiting this potential. To take advantage of the village's potential, a Village-Owned Enterprise (BUMDes) was formed. The purpose of BUMDes is to improve the village economy. Indonesia has more than 35,000 thousand BUMNDes, but only a few are progressing rapidly and most of them are dead. This research tries to find the causes of the success of BUMDes. Based on preliminary observations, several main factors cause some BUMDes to succeed and this factor also causes some BUMDes to not succeed. These factors are the quality of human resources, equity participation, social capital, governance, and sustainability. The results of research conducted in several BUMDes in the North Sumatra region indicate that the quality of human resources, capital participation, and governance has a positive and significant effect on the success of BMUDes.