Legal Strengthening of Village Credit Institutions to Drive Bali’s Economy through Tri Hita Karana

This study aims to analyze the institutional strengthening system of Village Credit Institution (Lembaga Perkreditan Desa-LPD) based on the philosophical values of Tri Hita Karana. One of the findings in this article is that the LPD service mechanism in Bali Province, which is based on the local wisdom of Tri Hita Karana, has become a key indicator in spurring economic growth. The method used in this study is normative legal research using primary, secondary, and tertiary legal materials. This study aims to address the normative gap in the position of LPDs as legal subjects. A clear legal position will lead to legal discovery. The legal position of LPDs is examined using the legal construction reasoning method to strengthen the position of LPDs as institutions under traditional villages, by utilizing primary legal sources. The expected output is that an understanding of this legal construction can serve as a reference for traditional actors and law enforcement, enabling them to formulate solutions to the normative gap that defines LPDs as legal entities within the legal framework but operates like other financial institutions; and unclear LPD supervision, which results in various problems and even cases of corruption. For the government, the legal findings from this research are expected to facilitate the preparation of regulations related to authority, supervision, and applicable laws and regulations.