Analysis of Village-Owned Enterprises (BUMDes) in Economic Empowerment and Extreme Poverty Alleviation in Rural Areas

Abstract

This study aims to examine the role of Village-Owned Enterprises (BUMDes) in economic empowerment and extreme poverty reduction in Garut Regency, focusing on five villages that have active BUMDes. Based on data analysis, the results of the study show that BUMDes play an important role in improving the welfare of rural communities through economic empowerment and reducing extreme poverty. The institutional performance of professionally managed BUMDes, with a clear organizational structure, high accountability, and a focus on local potential-based businesses, has been proven to support economic empowerment significantly. Economic empowerment carried out by BUMDes has succeeded in reducing the extreme poverty rate through increasing income and quality of life for village communities. In addition, the active participation of the community in the planning and management of BUMDes strengthens the impact of economic empowerment. Support from the government and village assistants, through training, capital provision, and policies that support business innovation, also strengthens the performance of BUMDes. Innovation in business models and business diversification are key to the sustainability and scalability of empowerment programs. These findings support community-based development theory and social business concepts, which emphasize the importance of local institutions in economic empowerment. Based on the results of the study, it is recommended that the government and related parties increase support for the development of BUMDes through policies, training, and capital provision, as well as strengthen community participation in the management of BUMDes to increase the impact of economic empowerment in rural areas.