DOMINANT FACTOR OF SIX C’s CRITERIA IN CREDIT DISTRIBUTION ACCORDING TO FARMERS IN KABUPATEN KEBUMEN

Abstract

The role of banks is very important in distributing funds from surplus budget unit to deficit budget unit. In distributing funds, banks need to make an assessment of credit scoring before make decision whether to give or reject a credit proposal. Borrowers in Indonesia mostly come from micro, small and medium enterprises. But, this party, particularly farmers in small city, still has many difficulties in getting a credit loan from the banks. Many farmers have potential to expand their business but there is always one problems occurred in their pursuit, lack of capital needed. But the problem is the banks unwilling to give them a credit loan without explaining the reasons. Therefore, a study is conducted to find out what is the dominant attributes that the farmers thought it is important to be included to get a credit loan approval. For the purpose of the study, there are 60 respondents derived from farmers who have not get loan approval in Kebumen. The questionnaires are derived from six C’s credit criteria from banks, which are character, capacity, cash, condition, collateral, and control. The statistical method used in this research is factor analysis. The factor analysis help the researcher to extract the variables into the dominant factors that represent farmers consideration about the importance of information provided in their credit request. The information gathered from this study is that the farmers consider three attributes as their priority in credit request, which are condition, capacity, and character. Since banks look the whole six attribute, they decide to reject the loan requested by the farmers. The gap occurred because lack of information given to the farmers in small city. Farmers should be given assistance from other parties such as banks or government in order to be able to understand more about credit bureaucracy, so it can attract them to apply credit loan with better application and requirement provided.