Application of the CART Method to Determine the Amount of Credit Limit in KIS Syariah Cooperatives

¹ Accounting Study Program, College of Vocational Studies IPB University, Bogor 16128, Indonesia
² Management of Agribusiness Study Program, College of Vocational Studies IPB University, Bogor 16128, Indonesia
³ Department of Business, The State University of New York, Suny Oneonta, New York, United States

^* Corresponding author: lesiafatma1@apps.ipb.ac.id

Abstract

For the purpose of giving credit, financial institutions conduct analysis. The credit limit must be changed based on the customer’s capacity to pay. A crucial task that must be completed is determining the limit by looking at a lot of factors, particularly the financial one, which includes cooperatives that provide microloans. One of them, Koperasi Simpan Pinjam dan Pembiayaan Syariah Kebajikan Ikamatabagsel Sejahtera (KSPPS KIS), does not strictly rely the determination of the credit limit on analysis, which causes credit issues to continue to arise. The percentage of cooperative consumers with the biggest current credit status has a minimum limit of IDR 2,200,000, with a duration of less than 50 weeks, according to the findings of an analysis utilizing the CART method and data from 173 customers of the KIS Cooperative. This section serves as a gauge for the credit limit’s size at the time of analysis. This demonstrates that a time of less than 50 weeks will result in a lower level of non-current credit status than a period of more than 50 weeks and other variables such as the ratio of expenses, the value of costs, and income. Future studies should be able to include more variables that cooperatives can evaluate when deciding credit limits.