Assessment of Factors Affecting Cooperatives’ Performance in Indonesia: The Case of Credit Union Cooperatives

The “Koperasi” (cooperative) has great potential for increasing Indonesia’s national economy and reduce unemployment. However, the performance of cooperatives is still considered weak. This study aims to identify the factors influencing the performance of cooperatives in Indonesia and the extent of their influence. It does this for the case of the Tangerang region in Indonesia. The study adopts descriptive analysis using partial least squares structural equation modelling (PLS-SEM), with the sample size of 35 cooperatives in South Tangerang. The independent variables are Internal Business Process (PPIB), Learning & Growth (PPP), Members perspective (PA), Financial perspective (PK) and dependent variable is Cooperative Performance (K). The results show that the model has an R-square value of 0.952 (95.2%) indicating that the ability of the independent variable to explain dependent variable cooperative performance is about 95.2% while the remaining 4.8% is explained by other independent variables not formulated in the research. The relationship of the financial perspective on the cooperative’s performance scored the highest path coefficient of 0.508, followed by member’s perspective and learning growth with 0.493 and 0.403. It indicates that financial ability plays a major role in improving the cooperatives’ performance while, and that the other two independent variables also have a significant impact on improving the cooperatives’ performance. However, the internal business process with a path of coefficient 0.138 has a weak relationship with performance. Research paper Keywords: Cooperative; Internal Business Process; Learning & Growth; Members perspective; Finance perspective; Cooperative Performance   Reference to this paper should be made as follows: Krisnawati, N., & Alfiandri. (2019). Assessment of Factors Affecting Cooperatives’ Performance in Indonesia: The Case of Credit Union Cooperatives, Journal of Entrepreneurship, Business and Economics, 7(2), 80–105