Financing Models for Sago Cake Makers in Supporting the Acceleration of Family Economic Improvement

Abstract

This study was aimed to: (1)To analyze the existing financing pattern. (2) To extract the perceptions of the sago cake makers towards conventional and sharia banking; (3) To extract the perceptions of sago cake makers towards their expected financing; and (4) To formulate the appropriate financing model. The research was done by conducting a survey using descriptive method. The purposive sampling was used and the data was collected through in depth interview and Focus Groups Discussion. The research findings are as follows: (1) The financing pattern being practiced is a financing pattern using fund that comes from own capital, loan shark, and others (relatives, neighbors), regular social gathering and cooperative; (2) The perceptions of the sago cake makers towards conventional and sharia banking is that the interest is against religious doctrine, but it is not the main consideration in selecting the type of bank; (3) The perceptions of the sago cake makers towards expected financing is that they expect the financing/credit collateral which is not in the form of land and building certificate but in the form of other moveable objects, the credit is provided in the form of cash money, short term period of credit with credit interest rate of 12 per cent per annum; and (4) The appropriate financing model is the financing model that has banking financing access through companion appointed by the Kepulauan Meranti Department of Industry and Trade and Cooperatives and SMEs.

DOI: 10.5901/mjss.2015.v6n6p310