Intellectual Capital in Management of Village Credit Institutions Towards Business Sustainability Based Catur Purusa Artha

Abstract

Objectives: Business continuity of the Village Credit Institution in Bali is closely related to the customs and culture of Balinese society, which are based on Hinduism. The key to successful intermediation by the Village Credit Institution as a microfinance institution is heavily influenced by local rules strictly adhered to by the Balinese people. The key to competitive advantage for the Village Credit Institution can be seen from the number of strategic resources it possesses, especially immaterial or intangible assets that are not visible on the balance sheet. The research objective is to test the Resource-Based View Theory in relation to intellectual capital and business continuity of the Village Credit Institution, as measured by the philosophy of Catur Purusa Artha.   Methods: The research method used to answer the research objectives involved a quantitative test with a Partial Least Square (PLS) approach.   Results: The results of the research show that structural capital, social capital, and reputation capital can improve the performance and continuity of the Village Credit Institution. The mediating variable tested in this study is the performance of the Village Credit Institution, which serves as a mediating variable for the effect of structural capital, social capital, and reputation capital on the sustainability of the Village Credit Institution in Bali. Increasing structural capital involves a better understanding of the organizational structure that emphasizes internal control structures and social capital, which includes understanding the common goals of traditional villages. Reputation capital involves maintaining policies that favor indigenous villagers without sacrificing the profitability of the Village Credit Institution.   Conclusion: The study concludes that intellectual capital, including structural, social, and reputation capital, plays a significant role in enhancing the performance and sustainability of the Village Credit Institution in Bali. The research highlights the importance of maintaining a balance between adhering to local customs and ensuring profitability to achieve long-term business continuity.