Determinants of Empowerment and Performance of Village Credit Institutions (Lembaga Perkreditan Desa) in Gianyar District

Microfinance Institutions (MFIs) have grown as instruments for economic development aimed at benefiting lowincome individuals.LPD (Lembaga Perkreditan Desa) are financial institutions owned by traditional communities and independently regulated through local regulations and provisions.The development of LPD in each customary village can reduce unemployment and contribute to alleviating poverty among village residents.This research is a quantitative associative study.Probability sampling was used to collect data, with 112 active LPD managers in Gianyar Regency as the sample size.The data analysis technique used was SEM PLS.The analysis results show that 1) Transaction Costs, Social Capital, and Empowerment have a positive and significant effect on performance.Meanwhile, Local Wisdom and Technology have a positive but insignificant effect on the performance of Village Credit Institutions in Gianyar Regency.2) Local Wisdom, Technology, Transaction Costs, and Social Capital have a positive and significant effect on the Empowerment of Village Credit Institutions in Gianyar Regency.3) Local Wisdom, Technology, Transaction Costs, and Social Capital indirectly have a positive and significant effect on performance through the Empowerment of Village Credit Institutions in Gianyar Regency.