Abstract
COVID-19 outbreak had brought a significant impact on economic dynamics in Indonesia, including rural economy. Rural economy continues to decline which is marked by an increase in the poverty rate and a decrease in the purchasing power of rural communities. This study aims to analyseBUMDesfinancial performance before and during COVID-19 pandemic in Banda Aceh city.BUMDesor Viilage-owned Enterprises are village business institutions managed by village’s community and village’s government in order to strengthen the village economy based on needs and potential of the village. The indicators of financial performance used in this study are sales and the ability ofBUMDesto pay their debts. This study uses primary data. The population are managers ofBUMDeslocated in Banda Aceh city. The sampling method used in this study is random sampling. Analysis of differential test betweenBUMDesfinancial performance before and during COVID-19 pandemic is performed using paired sample t-test. The financial performance variables are sales turnover and liquidity.BUMDessales turnover is measured by the number of sales, whileBUMDesliquidity is measured byBUMDesability to pay salaries and also BUMDes ability to pay operational debts. The results show that there is a significant difference between the number of sales before COVID-19 pandemic and the number of sales during COVID-19 pandemic. The descriptive statistics shows that the average sales before COVID-19 was higher than the average sales during COVID-19 pandemic. This significant difference is indicated by a p-value < 0.05, which is 0.05. Meanwhile,BUMDesability to pay its employees’ salaries andBUMDesability to pay debts are not significant, because the p-values > 0.05, which are 0.83 and 0.25 respectively. The descriptive statistics shows that the averageBUMDesability to pay debts before COVID-19 pandemic was higher than the average ability to pay debts during COVID-19 pandemic.
Highlights
Indonesia government since 2015 has distributed extra amount of money and authority to villages around Indonesia
Villages economics are the foundation of country economics development, Indonesia government delegates fund management authority to villages, so that villages are able to manage their own economic potential through BUMDes (Village-owned enterprises)
BUMDes accommodates the economic activities of rural community in a form of business entity that is managed professionally
Summary
Indonesia government since 2015 has distributed extra amount of money and authority to villages around Indonesia. The goal is to support villages so that they are able to manage their potentials to improve rural economy as well as the welfare of rural communities. Villages economics are the foundation of country economics development, Indonesia government delegates fund management authority to villages, so that villages are able to manage their own economic potential through BUMDes (Village-owned enterprises). BUMDes accommodates the economic activities of rural community in a form of business entity that is managed professionally. The main business activities of BUMDes still rely on the original potential of the village. This hopefully will bring benefits for rural communities by making community businesses more productive and effective
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