PERAN LEMBAGA KEUANGAN MIKRO DAN MANAJEMEN RESIKO KREDIT DALAM MENJAGA KELANGSUNGAN HIDUP UMKM DI SURABAYA DAN SEKITARNYA: PERSPEKTIF LEMBAGA KEUANGAN MIKRO

This research aims: 1. To analyze the role of small financing institutions in developing micro business; 2. To analyze the relationship between micro financing institution performance and micro business performance; 3. To analyze credit risk that is faced by micro financing institutions; 4. To identify the constraints that are faced by micro financing institution for giving a credit for micro enterprises; 5. To identify the strategy of micro financing institution in handling credit risk; 6. To identify the strategy that is implemented by micro financing institution for developing micro business. We used Focused Group Discussion (FGD) for data collection with the chief of LKM as the informant. There are five credit unions (CU) participating in this research, Pukat, Kopdit, Dwijasa, Mapan Sejahtera and Tirtadana. The result shows that CU has a role on giving added loan capital, giving entrepreneurial training. CU as financing institutions facilitates the access to get added capital for business. CU also facilitate providing credit consultant. CU performance related to SMEs performance. So, the better CU giving knowledge for the members of CU such as entrepreneurial training program, accessing alternative financing programs, and other business consultation, the better are SMEs’ performance. Having low performance for CU makes giving loan for the members will be hampered. The success or failure of credit unions and cooperation institutions, depend on manager’s commitment, mental, moral and performance. The major causes of bankrupcy of CU are the existing conflicts among managers, no capabilities and low morality that managers’ have. Keywords: small financial institution, credit risk management, survival of SME