Bankruptcy Risk of Non Bank Microfinance Institution (Case Study of Cooperative in Bandung District)

Abstract

Micro-credit market with very potential customer is still operating with free market mechanisms, so market participants should survive to maintain their position. Both Non Bank and Bank Micro Finance Institution Market as market players compete very tightly. Non Bank Microfinance Institution like Cooperative are pressured to compete although in very limited of capital. Limitation capital of Cooperative in very tight competition increase bankruptcy risk viewed by financial performance indicators, on the other hand Cooperative have mission to support micro, small and medium enterprises by financing credit service. The research aimed to know bankruptcy risk of Cooperative in Bandung District and conducted on -47 Cooperative as samples that spread on 20 sub districts in Bandung District with collecting primary and secondary data . The research used quantitative descriptive methods and Z Score Altman bankruptcy prediction models. The results show that Cooperative in Bandung District in an unsafe financial risk, so it potentially increase bankruptcy risk if it were not well managed