IMPROVING ECONOMIC DEVELOPMENT EQUITY THROUGH ECONOMIC DEMOCRACY-BASED BANKING CREDIT

Financial institutions of bank have a strategic role in national development, especially in economic activities. One of the businesses of the bank is giving credit. The role of banks in the provision of credit will be more vital, in relation to the high growth target of the Indonesian economy proclaimed by the government. Article 2 of Banking Law Number 10 of 1998 states clearly that Indonesian banking in conducting its business is based on economic democracy by using the principle of prudence. Article 33 Paragraph (4) of the 1945 Constitution contains provisions that the implementation of the national economy is based on economic democracy with the principles of togetherness, fair efficiency, sustainability, environmental insight, independence, and by maintaining the balance of progress and national economic unity. Liberalization of trade and economic globalization is very influential on economic policies. The efficiency and fair principles of banking policy in Indonesia are considered not fully implemented. Banking policies only prioritize the principle of efficiency by ignoring the principle of economic democracy. Indonesia's economic structure is regarded unevenly distributed. The conglomerate groups take a very large share of the economy through banking credit, but on the other hand, SMEs have difficulty in developing their business due to some barriers in accessing working capital through banking credit. Banking credit based on economic democracy will be able to create equal distribution of business opportunities for economic development actors, both large scale and SMEs, with thereby happen the relationship of harmonious cooperation and mutual support between the actors of the real sector of economy with the financial actors in supporting the national economic development