MICRO AND SMALL ENTERPRISES FINANCING MODEL THROUGH THE REVOLVING FUND MANAGEMENT INSTITUTION IN INDONESIA: AHP APPROACH

* Affiliation: Abstract : Airlangga University Email: taufiknugroho614@gmail. com The government established a Revolving Fund Management Institution (LPDB) which aims to help capitalize MSMEs by providing loan and STEI Tazkia Email: aamsmart@gmail.com financing assistance as needed. This study attempts to analyze effective MSME financing strategies to improve LPDB’s performance using Universitias Muhamadiyah Purwokerto Email: naelatytubastuvi@ump.ac.id the Analytic Hierarchy Process approach. The results show thatfrom the perspective ofgoals development, an increase in the workforce is considered more priority than a reduction in poverty and inequality. Meanwhile, from the perspective of the criteria for developing LPDB in Indonesia, the success of utilization is the priority compared to other criteria. From an alternative side, the form of a cooperative or Islamic cooperative is preferred over other forms.


INTRODUCTION
The business sector in middle and small micro sectors is a sector that has high adaptability to economic conditions and able to withstand the competition of large businesses (Sunarso, 2007). This can be seen based on the Central Statistics Agency's data which shows that, after economic crisis on 1997-1998, the number of MSMEs did not decrease, it even increased steadily, even able to absorb 85 million to 107 million workers.
Micro, Small and Medium Enterprises themselves are productive businesses owned by individuals or Business Entities that have entered the criteria of Micro Business. In Indonesia, the existence of MSMEs has a significant role in the National Economy. In 2015, Central Bankof Indonesia released a profile report on MSMEs which explained that MSMEs had a labor absorption rate of around 97 percent of all national workers and had a contribution to GDP of around 57 percent.
The phenomenon of the stable condition of Micro and Small and Medium Enterprises during the crisis period and its contribution to the Indonesian economy has become an attraction for the parties, especially the government, to provide a greater portion of assistance to continue to help and develop these MSME entrepreneurs. The other thing is also because the most dominant problem in the development of MSMEs is the lack of capital for entrepreneurs. The establishment of the Revolving Fund Management Agency by the Ministry of Cooperatives as a legitimate and official Government institution in helping MSMEs is undeniable also still has some obstacles and challenges in practice. In principle, LPDB is a government work unitthatdoesnotonly seek profitsanddoesnothavecompetitorsinconducting services to MSMEs. However, it needs to be anticipated regarding the Bank's and Non-Bank Financial Institution, which currently serves microcredit or retail businesses, which are also targets of LPDB-KUMKM . In addition, the low return on revolving funds due to economic factors such as low purchasing power is still a challenge for LPDB.
Based on these problems, researchers tried to analyze the micro ,small and medium business financing strategies that were effective to improve the performance of the Revolving Fund Management Institution using the approach Analytic Hierarcy Process.

LITERATURE REVIEW
The cooperative revolving fund management institution and micro, small and medium enterprises (LPDB-KUKM) is a work unit formed by the Ministry of Cooperatives and SMEs which implements the Public Service Agency (BLU) financial management system, which functions: 1. Implementation of collection return of revolving funds originating from revolving fund program loans from KUKM, budget funds from the state expenditure budget and other legitimate funding sources 2. Implementation of lending and or financing to Cooperatives and Micro, Small and Medium Enterprises (KUMKM) 3. Implementation of monitoring and evaluation of the implementation of fund management rolling KUMKM 4. Assessment and development of management of revolving funds KUMKM 5. Meaning of treasury, financial accounting, and general administration 6. Implementation of pemekrisan inter LPDB-KUMKM and 7. Implementation of other tasks given by the minister of Cooperatives and Small and Medium Enterprises. In its operational activities, LPDB KUMKM serves KUMKM by managing revolving funds for KUMKM financing, which include loans and other forms of financing that are suitable for KUMKM needs.
According to the Financial Services Authority, understanding Microfinance institutions is a financial institution specifically established to provide business development and community empowerment services, either through loans or financing in micro-scale businesses to members and communities, deposit managers and the provision of business development consulting services who are not solely seeking profit. Whereas according to Arsyad, Microfinance Institutions are institutions that provide financial services for microentrepreneurs and lowincome communities, both formal, semi-formal and informal who are not served by formal financial institutions and have been market-oriented for business purposes.
The Microfinance Institutions Sharia is the financial body whose main activities raise public funds in the form of savings (savings) as well as deposits and channel them back to the community in the form of financing based on Islamic principles through mechanisms that are prevalent in the world of banking So it could be explained that conceptually, LKMS is an institution which includes two types of activities at once namely (1) activities to collect funds from various sources such as zakat, infaq and shodaqoh and others that are distributed or channeled to those who are entitled to overcome poverty and 2) productive activities in the framework of new value-added and encourage human resource economic growth.
In fact at present, Islamic financial institutions, in general are experiencing developments, both athome and abroad. In fact, research conducted by Nurfalah et al (2018) states that Islamic banking is relatively more stable compared to conventional banking in the face of shock. This is also agreed by Rusydiana (2008) and is an interesting finding that needs to be proven through various researches in the future.
Other Research studies related to MSME analysis were also examined by Abdul Aziz and Eko Wicaksono, 2016 concerning Analysis of Alternative Credit Program Schemes for Micro, Small and Medium Enterprises. The results of this study explain that the scheme and the role of institutions that provide credit programs are one solution to increase access to capital for people with economic limitations. MFIs are considered to minimize risk due to basic problems, namely adverse selection, and moral hazard. MFIs that are specified in the form of cooperatives have good access to information for prospective debtors who are members of cooperatives. In this scheme, there are also supervised from supervisory institutions such as LPDB, so that this can minimize risk from fundamental problems, namely moral hazard, and adverse selection. aims to identify external and internal factors that determine the performance of small and medium enterprises (SMEs) processing products food-based, knowing its role in providing food-based products for the community, and formulating strategies to improve the performance of SMEs processing food-based products in Makassar City using Descriptive Analysis and Analytical Hierarchy Process.
The results show that important factors and priorities that determine the performance of SMEs are market availability, length of business, quality control, business management, and sales promotion as internal factors, and access to capital, access to market information, pro-business government policies, loan interest rates and technical guidance as external factors. The role of SMEs in providing food-based products for the community is included in the good category.
Rusydiana, Aam and Abrista Devi, 2013, Solve the problems and solutions to the development of Sharia Microfinance Institutions in the ANP BOCR approach, This study attempts to identify the causes and dominant factors that become obstacles in the development of LKMS in Indonesia, with the BOCRmethod approach Analytic network process (ANP), including the proposed strategic solution, the Research Results are based order of priority, the alternative aspects show that the technical aspects are a priority aspect, followed by legal / structure, market / communal, and HR aspects. Decomposition of the solution as a whole produces a sequence of priorities 1) Coaching/socialization/ mentoring of the community is a top priority, followed by 2) product innovation, 3) strategic location, 4) cooperation with other LKS and 5) making external elements as information centers and media socialization.
While the priority of strategies that are considered to increase the development of LKMS in Indonesia consists of 1) optimizing the role of the government in funding, 2) coordinating with PINBUK, and 3) linkage program LKMS-BMT-BPRS-BUS.

RESEARCH METHODOLOGY
In this research, data which were used from indepth interviewresult with expert and practition which have understanding about problems which were discussed. There was continued by filling questionairre in the second meeting with respondent. Generally, requirement of valid respondent in AHP is about experts who have have become expert in their own field. Data used in this study were the indepth interview with 9 expert on microfinance. The selection of respondent is based on the random sampling. The respondent selection in the AHP research was conducted by concerning respondent understanidng about problems which were observed.. The researcher prepared interviewed questions following the using condition of AHP tool. This table showed the example of AHP interview which the researcher used based on the researcher aim which was prioritizing development of microfinance and SMEs in Indonesia. The number of consistency of overall paired comparison was determined from Consistency Index (CI), CI = (max-n) / (n-1) where n is the matrix unit. The consistency scored can be checked by looking at the Consistency Ratio (CR) score under. In AHP, this is important because the high inconsistency level indicated that the respondents did not understand about different options. Ratio score is also important because it showed the robust estimation result in AHP (Lipovetsky& Conklin, 2002). This is the table of average random consistency index. This research was also the research of quantitative-qualitative analysis which aimed to find the score or the view which was represented by the respondent based on the preference of SMEs development sector. The analysis used was AHP method and it was processed by using Expert Choicesoftware.

RESULTS AND DISCUSSION
Phase 1 is model construction or decomposition to identify, analyze and structure the complexity of the problem into the appropriate AHP network, which includes: a) literature review, questionnaire and independent interviews with microfinance experts and practitioners to understand the problem; b) build AHP networks based on the above understanding; c) validation of AHP networks designed to experts and practitioners.
Phase 2 is the quantification of the model using pair-wise comparison, which includes: a) designing pair-wise questionnaires that correspond to AHP networks designed in phase 1; b) test the pair-wise questionnaire to prospective expert respondents and practitioners; and c) surveys to expert respondents and practitioners to guide them to complete the pair-wise questionnaire and maintain consistency. Phase 3 is synthesis and analysis of results, which include: a) processing data obtained in phase 2 with AHP (super decisions) software, synthesizing and obtaining the results, and calculating geometric mean and rater agreement 1 ; b) validation of the results obtained; and c) interpret results, analyze results, and provide policy recommendations.
In practice, the use of the AHP method in research is very varied in various fields, as stated by Sipahi & Timor (2010), Lee (2010) and Ho (2008). Meanwhile, in the Islamic finance economy, research with the ANP method has been carried out by Rusydiana (2016), Rusydiana and Devi (2013), Ascarya (2015), Rusydiana and Devi (2018), and other studies.

Model Analysis
At this stage, the researcher conducts literature studies on all aspects that are the objectives and criteria for LPDB development in Indonesia. In addition, in-also conducted depth interviews were to several respondents who were considered to be most aware of the problems being studied. As well as prioritizing searches are also done through filling out questionnaires so that with these three methods the authors can find aspects that will be the priority criteria, sub-criteria and alternative strategies for developing LPDB in Indonesia. Next, a model was made to be analyzed using the software. More specifically, this study follows the model used by Trisnojuwono et.al (2017).