Optimization of Corporate Social Responsibility for Micro, Small and Medium Enterprises Capital based on Profit Sharing System through Productive Partnerships between Companies and Financial Institutions
Parman, Ismail

Ekonomi Pembangunan Fakultas Ekonomi dan Bisnis Universitas Musamus Merauke

Abstract

This study aims to examine the optimization of Corporate Social Responsibility (CSR) funds in supporting the capital of Micro, Small and Medium Enterprises (MSMEs) based on a profit-sharing system in capital participation managed by the community. MSMEs play an important role in national economic growth. The MSME sector contributes to Gross Domestic Product (GDP) of 61%, or worth IDR 9,580 trillion, even the contribution of MSMEs to labor absorption reaches 97% of the total workforce in 2023. However, the reality is that the MSME sector often experiences obstacles in accessing capital. This research uses a qualitative approach by conducting literature studies and secondary data analysis related to CSR practices in supporting MSME capital by adopting a profit-sharing system in community-managed capital participation. The results show that optimization of CSR funds for MSME capital can be done through various approaches, including providing business capital, entrepreneurship training, infrastructure development, and market access. The management of CSR funds should be carried out in productive partnership collaboration between companies and financial institutions which in fact are financial intermediation institutions that serve as a liaison between companies as CSR fund providers and the MSME business community. For justice and economic sustainability of the community in the MSME sector, CSR funds as business capital are managed based on a profit-sharing system (read- Sharia economy system of mudharah, musharakah, etc.). In addition, the company^s active involvement in understanding the needs and challenges faced by MSMEs is also a key factor in the effectiveness of CSR programs. These findings provide insight for companies looking to allocate their CSR funds more effectively to support the sustainable growth and development of the MSME sector. In addition, this research also provides a basis for the development of public policies that encourage synergy between the financial institutions, private sector (companies) and MSMEs in creating an inclusive and sustainable business ecosystem

Keywords: Profit sharing system, Corporate Social Responsibility, Micro small and Medium Enterprises and productive partnership

Topic: Agricultural Socio-economics