The Role of Community Cooperatives to Solving Household Debt of Small-Scale Fishing Communities

Abstract

          The main objective of this research is to explore debt risk management approaches and develop an innovative model for addressing household debt among 226 local fishermen. Using participatory action research, collected quantitative and qualitative data through fieldwork, surveys, in-depth interviews, and focus groups with stakeholders. The findings suggest that the innovative model for managing debt risk and improving income capabilities for indebted local fishermen, often tied to patronage systems, has significant potential. Community cooperatives can help these fishermen escape long-standing informal debt, but their limited capacity necessitates collaboration with local Islamic cooperatives. Moreover, the proposed model demonstrates sustainability, as it does not rely solely on support from strong Islamic cooperatives. The researchers designed key mechanisms utilizing existing local resources, increasing the likelihood of success in resolving the debt issues of local fishermen. This model can also be adapted to similar challenges in other fishing communities with comparable contexts and problems.