Assessment of MSMEs Working Capital Loans at Bank Mandiri Malang Branch, Indonesia

Abstract

This research is motivated by the increasing number of MSMEs. In line with the increasing number of MSMEs, there are constraints in the working capital of MSMEs. Bank Mandiri became one of the state-owned banks that have working capital credit facilities for MSMEs. Low-interest rates compared to other state-owned banks are the main attraction of Bank Mandiri to MSMEs in applying for loans. Bank Mandiri uses the 5C principle (Character, Capacity, Capital, Collateral, and Condition of Economy) in conducting credit rating of working capital for MSMEs. This research has the focus of research in this research is to know how Bank Mandiri Malang Branch performs an assessment of working capital credit for MSMEs. The research was carried out using descriptive qualitative techniques. Techniques of collecting data using interviews, observation, and documentation. In data analysis techniques use data reduction, data presentation, and conclusion. Furthermore, to test the validity of data used source triangulation techniques, method triangulation, and triangulation time. The results showed that (1) Credit assessment using 5C principle, namely Character, Capacity, Capital, Collateral, and Condition of Economy. Application of 5C principle in credit rating at Bank Mandiri Malang Branch both in accordance with SC elements. (2) There are some optimal 5C elements used by Bank Mandiri, namely Character, Capacity, and Collateral. Advice for Bank Mandiri Malang Branch especially Bank Mandiri Wahid Hasyim, that is needed to be given understanding about SC so that understanding of credit assessment aligned, there should be a monthly monitoring system to ensure working capital credit given to debtor used for its allotment, and give a special program to support effort debtors both in terms of marketing and managerial so that the smoothness will be more secure.