HomeRecoletos Multidisciplinary Research Journalvol. 2 no. 2 (2014)

Financial Assessment of A Credit Union In West Timor, Indonesia

Paskalis Seran | Corazon G. Anzano



The study is an assessment of the financial performance of a credit union in West Timor, Indonesia using the PEARLS Monitoring System established by the World Council of Credit Union. The credit union is run by the Catholic diocese that envisioned prosperity to its members coming from different religious denominations and from low income families thus the need to recommend improvements to ensure its sustainability and service to the community. The study analyzed financial performance from 2007 to 2012 and determined members’ satisfaction of services rendered. It used semi-structured survey instruments, personal interview, and focus group discussion to gather data. Findings of the study revealed that members’ savings were not sufficiently protected. However, members were very satisfied with almost all of the services offered by the credit union. The study concludes that there is a need to improve its portfolio quality and liquidity management as evidenced by a high rate of loan delinquency. To ensure more sustainable operations, it is recommended that management exert effort to increase net loans receivables but at the same time address members’ high delinquency rate for loans. Additional investment on liquid assets is suggested for loan portfolio to generate more revenue and increase the net institutional capital. It is further recommended that future studies would include governance and organizational performance particularly on credit management processes to complement the results of this study.