Factors Causing Fraud In Villages Credit Institutions (VCI) In Bali

Village Credit Institutions (hereinafter referred to as VCI) are microfinance institutions that have an important role in supporting the economy of rural communities, but recently a number of VCIs have experienced poor health conditions, some even stopped operating. The poor health conditions of VCIs in Bali are likely caused by irregularities (fraud) in their management. This argument is supported by a number of mass media reports that write that several VCI managers are entangled in legal cases such as corruption. Based on this, this study was conducted to explore the factors that cause irregularities (fraud) in VCIs in Bali. The study was designed in the form of qualitative research, namely by digging up information from a number of practitioners and academics. The determination of informants was carried out using the snowball technique, where in this case nine informants were obtained who had qualifications regarding VCIs. The results of the exploration found that the main factors causing fraud were weak supervision, weak governance, weak integrity of management, weak human resources and regulations, weak leadership, management, and regulations, poor management mentality, weak management, and poor cooperation.