The Constraints and Barriers for Loan Distribution by Financing Institutions to Cooperant Members

The purpose of this research is to know and analyze the condition of cooperatives through the capital factor, human resources, managerial aspects, passive members and socialization, public awareness, spoilage, and economic democracy, which strongly influence the barriers and effectiveness of lending cooperatives in Indonesia. The dependent variables are the main constraints of cooperatives in lending, whereas the independent variables are capital, human resources, managerial aspects, passive members and socialization, public awareness, spoilage, and economic democracy. In this research, descriptive analysis and the structural equation modeling test are the data analysis techniques that were used to measure the research instruments. The research samples used in this study consist of 203 cooperative management institutions in North Sumatra, Indonesia. The sampling technique used was the purposive sampling method. This study concludes that managerial factors, passive members and socialization, public awareness, lack of economic democracy, capitalization, and a lack of participation have a significant effect on the barriers and effectiveness of lending cooperatives.