Initiating the Establishment of BUMDesa, DIE FEB UB Team Departs to Ngadirejo Village, Malang Regency

Empowerment of rural communities through formal village institutions is something that cannot be avoided this time. The village as the smallest government institution actually has a big contribution in determining the success of national development. Through Law Number 06 of 2014 concerning Villages, Article 67 states that the Village has the right to: regulate and manage community interests based on the rights of origin, customs, and socio-cultural values ​​of the village community; establish and manage Village institutions; and get a source of income. Universities besides being tasked with providing learning through education and research functions, are also obliged to carry out community service in helping solve problems that occur in the village.

The Service Team of the Department of Economics (DIE) FEB UB Service, chaired by Prof. Moh. Khusaini and consisting of Moh. Athoillah on September 24 2022 has provided assistance to the community in Ngadirejo Village, Jabung District, Malang Regency to prepare for the establishment of a Village Owned Enterprise (BUMDesa). Ngadirejo Village does not yet have BUMDesa, but the desire from the village government is very strong so that it can be facilitated and assisted in forming BUMDesa. This is as stated by M. Toib, Head of Ngadirejo Village, during the coordination before the activity took place “We have actually wanted to have BUMDesa for several times ago, but so far this has not been realized. Hopefully, with this assistance, Ngadirejo Village will soon have a BUMDesa that is active and useful for the community.”


The activity started with a speech from the village represented by the Village Secretary, Zainuri and continued with the delivery of material about BUMDesa by representatives of the community service team members, Athoillah. In his presentation Athoillah conveyed the purpose and benefits of BUMDesa, that BUMDesa was formed not to shut down existing community economic activities or to take on the role of already running economic actors. More than that, BUMDesa was formed with the aim of increasing the economic level and welfare of the community collectively and sustainably.

Mentoring activities are carried out by conveying material on the importance and benefits of BUMDesa in supporting the economy and welfare of village communities. “To form a BUMDesa, the village government should first map the potential of the village and create a business unit based on local resources. Then, after the potential of the village is mapped, we can prioritize what to be developed,” he said.

BUMDesa, is an economic institution that is in accordance with the people’s spirit, has three general objectives. First, carrying out economic activities through business management, investment development, encouraging economic productivity with village potential; secondly, BUMDesa was established not to take over economic activities that have been carried out by residents, but to create support for service functions for superior village products; and thirdly, obtaining profits to increase Village Original Income (PADes) and provide added value to village assets and develop the economic resources of rural communities.

Since the emergence of Law Number 11 of 2020 concerning Job Creation, village-related regulations have been strengthened by the issuance of Government Regulation Number 11 of 2021 concerning Village-Owned Enterprises. This adjustment has an impact on several things including: (i) BUMDesa’s ability to make loans; (ii) the opening of business opportunities with other parties or other business entities; and (iii) ease of ending a business (bankruptcy), without dissolving the business entity. (ath/ Humas UB/ Trans. Iir)