Introduction

The current state of Indonesia's economy demonstrates a fairly complex dynamic. The main economic challenges remain associated with suboptimal economic growth, high levels of poverty and unemployment, as well as social and income inequality [1]. Cooperatives serve as one of the government’s initiatives to reduce poverty in Indonesia. Referring to Law Number 25 of 1992 concerning Cooperatives, it is explained that the establishment of cooperatives aims to improve the welfare of their members, strengthen the people’s economy, and contribute to national development and the reinforcement of social networks. As a form of community-based economic system, cooperatives hold a strategic role in supporting economic growth, particularly at the community level.

Cooperatives are one of the government’s solutions to address economic issues in accordance with Law Number 25 of 1992 concerning Cooperatives. A cooperative is a business entity comprised of a group of individuals whose activities must be based on cooperative principles. According to reports from the International Cooperative Alliance (ICA), cooperatives play a significant role in creating job opportunities, improving members’ income and welfare, and promoting more inclusive economic growth. However, despite their positive contribution, cooperatives still face considerable challenges, particularly those related to human resource management, limited capital, technological development, and existing regulatory policies [2]. Human resources, which hold a crucial role in the sustainability of cooperatives, often encounter constraints such as lack of understanding, financial management issues, transparency, and inadequate business strategies [3]. Furthermore, misuse of authority and lack of responsibility among cooperative administrators also pose obstacles. Capital is one of the essential aspects in the operation of cooperatives. However, a considerable number of cooperatives have ceased operation due to limited financial capital. Cooperative capital may be obtained from primary savings, which every member is required to pay upon initial registration, mandatory savings that must be deposited regularly within a specified period, and voluntary savings, where members may deposit additional funds at their discretion. Cooperative capital also comes from external sources such as loan capital, in which cooperatives receive financial assistance from banks or other financial institutions. In addition, cooperatives may obtain reserves derived from the remaining operating results (SHU), as well as grants or financial assistance provided by the government. Despite the variety of capital sources, cooperatives often remain constrained due to insufficient capital availability [4]. Although cooperatives have existed for a long time, a lack of guidance and support from the government and financial institutions is still commonly found, limiting cooperative business development. In this context, the lack of government support includes limited services, facilities, and counseling, while cooperative policies and work programs still tend to arise primarily from government initiatives [5]. Recognizing these obstacles, the government has undertaken various efforts to address the issues, including strengthening cooperative institutional structures, providing human resource training, and offering business protection and support [6]. To ensure more focused implementation, regional governments are granted authority to regulate their respective regions under the principle of regional autonomy, as stipulated in Article 18 of Law Number 23 of 2014

In response to these challenges, the Kediri City Government initiated an innovation by utilizing cooperatives as one of the instruments to support local economic development. Kediri City has various types of cooperatives such as Village Unit Cooperatives (KUD), Indonesian Civil Servants Cooperatives (KPRI), Kediri Employee Cooperatives (KOPKAR), Market Cooperatives (KOPPAS), and others; however, they have not yet effectively empowered communities, particularly at the smaller neighborhood level (RT). Therefore, the Kediri City Government introduced a program innovation by establishing cooperatives at the RW level, known as the “One RW One Cooperative” program. This initiative enables the program to reach the smallest community structure, as its members are recruited from each RT within the RW. Nevertheless, capital limitations remain the predominant obstacle experienced by cooperatives. Observing this issue, the Kediri City Government launched the Community Empowerment Program (PRODAMAS Plus) to support cooperatives’ sustainability. Through this program, the government provides grants to each RT, funded by the Regional Revenue and Expenditure Budget (APBD) of Kediri City. According to Kediri Mayor Regulation Number 23 of 2020, Prodamas Plus allocates a grant of 100 million rupiah per RT, with up to 30% designated for the economic sector. In this program, cooperatives fall under the economic category. With this grant support, RW-level cooperatives that were previously inactive due to financial limitations are able to operate again.

Kemiri Makmur Cooperative, located in RW 3 of Manisrenggo Village, is a savings and loan cooperative that had previously ceased operation due to limited capital, but was able to resume and continue developing after receiving funding from Prodamas Plus. Based on deliberations among each RT within RW 3, it was agreed that the Prodamas Plus fund of Rp100,000,000 would be allocated to the economic sector and directed to the RW cooperative, namely Kemiri Makmur Cooperative. Through Prodamas Plus, financial circulation within Kemiri Makmur Cooperative was strengthened. Although the program has officially ended, its benefits continue to be felt by the cooperative to this day. Based on this background, the researcher is interested in conducting an in-depth study on the effectiveness of the Prodamas Plus grant program for the sustainability of savings and loan cooperatives using the effectiveness framework proposed by Steers (1977), which consists of five key criteria: production, efficiency, satisfaction, adaptation, and development [7].

M ethod

This study employed a qualitative descriptive research method aimed at gaining an in-depth understanding of the effectiveness of the Prodamas Plus program on the Kemiri Makmur Cooperative. The researcher applied purposive and snowball sampling techniques to determine informants, with the cooperative administrators serving as key informants and the cooperative office as the main supporting informant. Data were collected through semi-structured interviews, financial report documentation, and secondary data sources. Data analysis followed the interactive model of analysis developed by Miles, Huberman, and Saldana, consisting of data collection, data condensation, data display, and conclusion drawing.

Result and Discussion

The author analyzes and describes the findings based on the focus and objectives of the study. The results obtained in this research are presented according to the five program effectiveness criteria proposed by Steers (1977), namely Production, Efficiency, Satisfaction, Adaptiveness, and Development. The following provides a more detailed explanation:

1. Production

According to Steers (1977) in Organizational Culture by Edy Sutrisno, production may take the form of goods or services in accordance with the capabilities of an organization and the needs of its environment. Based on interviews with the administrators of the Kemiri Makmur Cooperative as key informants, it was stated that Kemiri Makmur operates as a savings and loan cooperative in which its primary output is service-based. The services provided can be observed through the cooperative’s financial service delivery to its members, including savings (fund deposits) and loan distribution. Kemiri Makmur Cooperative, which maintains a quality-oriented approach supported by Prodamas Plus grant funding, consistently prioritizes the needs of its members and surrounding community. This finding aligns with the study conducted by [8] which states that in savings and loan cooperatives, services must be provided with quality-oriented performance to meet the expectations of members and cooperative service users.

2. Efficiency

This criterion describes the relationship between input and output within an organization. In program implementation, efficiency reflects the organization’s ability to manage time, human resources, and financial expenditure to achieve objectives optimally. In this study, efficiency is measured by examining capital, human resources, and time, with the following results:

Tabel 1. Result and Discussion

a. Capital

As a savings and loan cooperative, capital has a significant influence on the development of the cooperative. At the inception of Kemiri Makmur Cooperative, capital was sourced from self-managed funds contributed by its members. The types of savings within the cooperative include principal savings, mandatory savings, and voluntary savings, with voluntary savings being non-compulsory. The accumulated capital from these funds is as follows:

Table 2. Development of Own Capital of The Kemiri Makmur Cooperative

The report indicates that self-managed capital was insufficient to provide large loans; therefore, after receiving the Prodamas Plus grant, the cooperative’s management was able to offer loans in larger amounts. This is evidenced by the management’s accountability report at the end of each year, which stated that in 2024, Kemiri Makmur Cooperative’s income amounted to IDR 39,016,000. This income was derived from interest service revenue of IDR 30,470,000, administrative fees of IDR 7,866,000, and other income of IDR 680,000. In addition to the income earned, Kemiri Makmur Cooperative also possesses assets.

According to the comparative balance sheet report, there are no non-current assets. The total assets of Kemiri Makmur Cooperative amount to IDR 295,956,117, comprising cash of IDR 67,762,417 and member loan receivables of IDR 228,193,700. The Prodamas Plus grant has assisted Kemiri Makmur Cooperative in its financial cycle, where the generated income significantly impacts the net operating surplus (SHU). Based on the cash flow statement for the period ending December 31, 2024, the gross SHU was IDR 39,016,000, compared to IDR 34,590,500 in 2023. The managed SHU resulted in a running SHU of IDR 5,399,630 in 2024, and IDR 2,338,000 in 2023. With the increased capital, Kemiri Makmur Cooperative is able to provide larger loans, and its financial turnover also operates efficiently. This is consistent with the findings of [9] which indicate that larger capital has a positive and significant effect on cooperative development and the net operating surplus (SHU). Moreover, the Prodamas Plus grant provides substantial benefits to the surrounding community, as supported by the research of [10].

b. Human Resources

The fully obtained Prodamas Plus grant has also influenced the increase in membership. The community is attracted to join the cooperative because Kemiri Makmur Cooperative is able to provide larger loans. Furthermore, the community has greater confidence in borrowing from Kemiri Makmur Cooperative, as its management members come from the community itself. Based on the reports obtained from Kemiri Makmur Cooperative, the annual membership over the past five years is as follows:

Table 3. Number of Members of the Kemiri Makmur Cooperative

The data indicate that the membership of Kemiri Makmur Cooperative continues to increase annually. This growth is also attributed to the quality of the cooperative’s management, as they possess the capability to fulfill their duties and responsibilities, contributing to the continuous increase in members. This is consistent with the findings of [11] which state that human resource quality and member productivity have a positive impact on cooperatives. However, the increase in membership does not guarantee succession in future management. A challenge identified in this criterion is the reluctance of members to continue in managerial roles when the 2025 management term ends. This occurs because the majority of registered members have their own commitments and feel insufficiently skilled in managing the cooperative, particularly in roles such as treasurer.

c. Time

The aspect of time efficiency constitutes an essential component in evaluating program effectiveness. Based on the interview findings, the explanation of time efficiency in this section refers to the duration of activities conducted within the cooperative, such as loan processing, savings transactions, and other administrative procedures. Loan services involve varying installment periods, which are agreed upon prior to the loan disbursement process. Before disbursement, the management also reviews the member’s balance to determine eligibility; if the balance meets the requirement, the funds can be disbursed within a maximum of one day. All savings and loan activities at Koperasi Kemiri Makmur are regulated by the applicable Standard Operating Procedures (SOP). The following is the SOP of Koperasi Kemiri Makmur as described by the cooperative management during the interview:

Figure 1. Standard Operational Procedure for applying to become a member of the Kemiri Makmur cooperative

Apart from the SOP for registering to become a cooperative member, the following is the SOP or sequence for loan deposits and loan applications in accordance with the previous statement, namely as follows:

Figure 2. Standard Operational Procedures for loan deposits and loan applications for the Kemiri Makmur cooperative

The existence of clear SOPs regarding savings and loan activities at Kemiri Makmur Cooperative makes processes more practical for members, as there are well-defined regulations. All members have understood these provisions and do not perceive them as burdensome; in fact, they consider the SOPs to make the procedures clearer and more practical. This is consistent with the findings of [12] which indicate that clear SOPs result in more effective and structured credit procedures and reduce loan defaults by borrowers. Based on interviews with the treasurer of Kemiri Makmur Cooperative, although late payments by members are rare, such delays can still be managed through personalized approaches, allowing management to understand the reasons for delayed payments, considering that the cooperative is intended to support the local community’s economy.

3. Satisfaction

Table 4. Result and Discussion

In the satisfaction criterion of program effectiveness, the focus lies on understanding community responses toward the ongoing program. Satisfaction is reflected in the extent to which the services and benefits provided by the cooperative meet the expectations and needs of its members. Based on interview findings with members of the Kemiri Makmur Cooperative, the cooperative management, and other relevant stakeholders such as the Village Office and the Department of Cooperatives, it was stated that the substantial Prodamas Plus grant has increased public enthusiasm to make optimal use of the assistance. This is evidenced by the community’s active participation in program socialization activities. Furthermore, as explained in the previous section, in the economic domain, community enthusiasm is also reflected in the growing number of individuals who join the Kemiri Makmur Cooperative to benefit from the program in support of the local economy. Cooperative members also reported that the services provided by the cooperative management were perceived as friendly and satisfactory, making them feel comfortable engaging in savings and loan activities at Koperasi Kemiri Makmur. In line with research by [13] which also explains that community responses toward the Prodamas Plus program were positive, as the grants received could be utilized for economic initiatives directed through cooperatives capable of fostering local economic development. The community also expressed satisfaction with the Prodamas Plus grant, as it contributed to improving the economic conditions of the surrounding area.

4. Adaptation

Table 5. Result and Discussion

In the context of organizations or programs, adaptation encompasses the ability to respond to changes in policies, community needs, technological developments, and shifting socio-economic conditions. Based on interviews with relevant informants, one form of adaptation by Kemiri Makmur Cooperative upon the introduction of the Prodamas Plus grant was to hold meetings among the management. This indicates that the cooperative actively adapted by organizing gatherings with members to communicate the availability of Prodamas Plus funding. However, the disbursement of the grant was delayed during the pandemic, which required the community to also adapt to the changing environment. The community successfully adapted by utilizing digital media. To maintain communication with members, the management leveraged WhatsApp groups to disseminate information. As an adjustment to the restricted conditions, the cooperative continued to conduct in-person meetings while implementing health protocols, consistent with the findings of [14] which state that cooperatives applied health protocols during meetings to ensure the continuity of services. Additionally, adaptation included the use of social media to disseminate information.

Furthermore, another form of adaptation was the reduction of loan interest rates at Kemiri Makmur Cooperative following the receipt of a substantial grant. Prior to receiving the Prodamas Plus grant, the cooperative set the loan administration fee at 3% and the loan service fee at 2%. After obtaining the grant and significantly increasing its capital, the management, together with the members, agreed to reduce the loan interest rate as an effort to support the community’s economic relief. Consequently, the administration fee was lowered to 2%, while the loan service fee remained at 2%. This reduction in loan interest demonstrates that Kemiri Makmur Cooperative adapted as a form of adjustment to its environment.

5. Development

Table 6. Result and Discussion

According to Steers (1977), the development criterion for program effectiveness emphasizes the extent to which an organization can demonstrate increased capacity, performance growth, and progress in utilizing its resources. Development serves as evidence that an organization is capable of sustaining itself and continuing to grow across different eras. In line with this explanation, interviews and field findings indicate that Kemiri Makmur Cooperative demonstrates its development through innovation. One successful innovation is a direct result of the substantial Prodamas Plus grant received by the cooperative. The grant was utilized by Kemiri Makmur Cooperative to establish a grocery cooperative, which helps and facilitates the community in meeting their daily needs. The following presents the innovation implemented by Kemiri Makmur Cooperative, namely the grocery cooperative:

Figure 3. Kemiri Makmur Basic Food Cooperative

The establishment of the grocery cooperative was a development strategy, consistent with the findings of [15] which indicate that the creation of grocery units is a development strategy driven by cooperative policies and practices. However, this cooperative operated for only one year due to space limitations, as its activities were conducted in the private residence of one of the Kemiri Makmur Cooperative’s managers, restricting storage capacity for goods. Additionally, human resources to manage reports related to the grocery activities were limited. Consequently, the grocery cooperative operated for only one year, despite significant community interest. Although this innovation was not sustainable in the long term, the cooperative management remained active in participating in training programs, both organized by the Cooperative Agency and through independent initiatives. Interviews with management representatives who attended the training, specifically the treasurer, revealed that the training was valuable in assisting the management of Kemiri Makmur Cooperative, as the substantial Prodamas Plus grant required careful and knowledgeable management.

Conclusion

Based on the research findings, the Prodamas Plus program has been proven to have a significant impact on enhancing the capacity and operational sustainability of Kemiri Makmur Cooperative, RW 3, Manisrenggo Subdistrict, Kediri City. The program grant contributed to increases in capital, assets, income (net operating surplus), and membership, thereby strengthening the savings and loan functions and expanding access to financing for the community. Furthermore, the program encouraged the emergence of business innovations, such as the grocery cooperative, although these innovations have not yet been sustainable.

Nevertheless, the program’s effectiveness remains constrained by several internal challenges, particularly in organizational governance, human resource capacity, digitalization of administrative processes, and limited operational facilities and long-term business planning. Thus, while Prodamas Plus is considered effective in enhancing cooperative performance during the initial stage, the sustainability of its benefits requires additional support, including mentoring, institutional capacity building, and regular evaluation mechanisms.

Acknowledgments

The author expresses sincere gratitude to all parties who have provided support in the preparation of this article. Special thanks are extended to the management of the Prodamas Plus Community Empowerment Program, the management and members of Kemiri Makmur Cooperative RW 3, Manisrenggo, as well as the informants who willingly contributed their time to provide the necessary data and information. Appreciation is also conveyed to the supervising lecturers and fellow academics who offered valuable input, suggestions, and guidance throughout the research and writing process. It is hoped that this work can contribute to the advancement of knowledge and the practice of community empowerment.