Performance and Efficiency of Village Unit Co-operatives in Madiun Regency

Abstract

The purpose of cooperatives in improving its members’ welfare can be achieved if the cooperative has good performance and efficiency. This study aims to (1) analyze the financial performance of KUD in Madiun Regency, (2) determinate the factors that influence the profit of KUD, (3) evaluate the efficiency level of KUD in Madiun Regency and (4) determinate the factors that influence the efficiency level. Financial performance was measured using financial ratio analysis. The efficiency level was measured by employing Data Envelopment Analysis (DEA), and multiple regression analysis was used to determine the factors influencing the profit and efficiency level of KUD in Madiun Regency. A total of 16 KUD’s were used as research samples, with data used in each KUD covering data from 2015 to 2017. The results showed that KUD dominated liquidity, solvency, and profitability with unhealthy, not healthy, or very unhealthy criteria. Factors that significantly affect the profit are the number of members and the total business volume. Meanwhile, the efficiency level shows that most (≥50%) Village Unit Co-operative (KUD) in The Madiun Regency is inefficient. Factors that significantly influence KUD’s efficiency level in the Madiun Regency are the director’s age, the supervisory’s education, the supervisory’s experience, and the manager’s experience. Furthermore, the study found a high positive correlation between financial performance (NPM) and KUD’s efficiency level in Madiun Regency.