Empowering Micro Business: Program Effectiveness Assesment of KPN in Lhokseumawe

Kredit Peumakmu Nanggroe (KPN) is a program providing soft loans with an interest rate of 5 percent per year which aims to empower low-income communities, especially victims of conflict and the tsunami disaster in all districts / cities. KPN initiated by the Government of Aceh since May 2007 in cooperation with the Regional Development Banks (BPD) of Aceh. Based on recent data, the realization of the distribution of KPN reached Rp 50 billion for 16,857 customers (people). The program initially received a positive response because they will be able to empower the business community after battered by the conflict and the tsunami. But after the program disbursed emerging various problems, so that by the end of2008 KPN program is suspended. This study aims to look at the effectiveness of the management of KPN with located in the city of Lhokseumawe. The research uses a qualitative approach with respondent covering the local government of Aceh and Lhokseumawe City, BPD Aceh both home and Lhokseumawe branch office, customers, and elements of society are engaged in the field of microcredit. The results showed that the management of KPN has not been effective to empower micro businesses due to several factors. First, the weak management of BPD in the management of KPN The indication can be seen from the low level of socialization programs; inaccuracies lending; lack of business assistance; and the lack of monitoring and evaluation. Second, the intervention of the Governor in operational technical KPN, the form of intervention is mainly done at this stage of lending, which led to the BPD does not do proper verification against viable venture capital provided. In addition, the Governor did not coordinate with relevant agencies to be involved as has been compiled in the technical instructions. As a result, KPN has not impacted the program effectively to the development of customer business.