Strengthening Supply Chain Financing in Village-Owned Enterprises (BUMDes)

¹ Management Department, UPN Veteran Yogyakarta, Yogyakarta, Indonesia
² Management Department, Jendral Achmad Jani University, Yogyakarta, Indonesia
³ Master Student of Management Departement, UPN Veteran Yogyakarta, Yogyakarta, Indonesia

^* Corresponding author: titik.kusmantini@upnyk.ac.id

Abstract

Village-Owned Enterprises (BUMDes) are community- and village-managed business institutions aimed at strengthening the village economy. In Indonesia, BUMDes have significantly contributed to village economic growth, especially in the Yogyakarta Special Region (DIY). This study explores (1) the role of BUMDes in improving the village economy, (2) their ability to manage financial flows from a supply chain perspective, and (3) challenges in supply chain financing. Using a qualitative approach with descriptive analysis, findings show that BUMDes businesses—such as handicrafts, small industries, tourism services, trade, and cooperatives— boost local economies. Financially, BUMDes managers effectively budget for working capital using internal profits and external funding from government grants, bank loans, and corporate social responsibility funds. However, they face challenges in income projection due to cash flow inconsistencies from non-cash sales, affecting operational costs. Strengthening financial flow management through education on supply chain financing, value assessment, optimal contract schemes, and alternative third-party collaborations can enhance business sustainability.