AN ANALYSIS ON SME DEVELOPMENT MODEL ( A STUDY ON THE DEVELOPMENT OF SME )

This research aims to evaluate SMEs development models done by an institution that have social responsibility. The Bank of Sumatra Utara was chosen for achieving many success in developing SMEs. The result is believed to be useful for the government and the institution to further develop the SMEs. This research reveals the strengths, weaknesses, opportunities and threats that the SMEs face, especially the SMEs that are being developed by the institution. This research uses quantitave descriptive approach with SWOT method. The research began with model identification on SMEs development, marketing, funding and other facilities related to SMEs development under the institution. Further, SWOT matrix was mapped in order to choose the best strategy to develop the SMEs. The result of this research reveals that SMEs development strategy of the Bank of Sumatra Utara is an aggressive strategy, with courses/training in all aspects of enterprise management and establishing relationship with other institutions and universities for knowledge and technology transfer as the models of development.

I n these four recent years, Corporate Social Responsibility (CSR) has become a trend in Indonesia.Compared to the previous years, there are more enterprises that have implemented that program.This Corporate Social Responsibility (CSR) concept, according to the World Bank, is a commitment of a company to act ethically and to give contributions to the continuous development of the society through cooperation with several stakeholders in order to improve their living standards by using means that give positive effects to business interests, continuous development agenda, and the society in general (Kiroyan, 2009).Through CSR, enterprises will no longer focus solely on gaining profits, but rather expand their priorities to cover other aspects, such as financial, social, and other aspects related to human environment (Suharto, 2006).
Many large enterprises all over the world take part in implementing their Corporate Social Responsibility (CSR) programs, including in Indonesia, in which the programs have become the government's program.Those enterprises train SMEs that often struggle with their businesses.The enterprises also teach local societies on how to start new SMEs so that the people in those societies can receive income.If reviewed further, those enterprises indirectly implement corporate social responsibility programs in order to increase the standard of living for the people in a region/an area.
The increasing competition in the market puts SME's products in a state that the society has low demand for the products.That situation is caused by the product's low quality (below market standard) and the product's poor packaging, even though costumers are more likely to buy well-packed products.Therefore, CSR program supervised by Partnership and Environment Development Program (PEDP) is aimed to help the SMEs to operate and grow their businesses.
Problems that the SMEs must face create weak enterprise network, limited capability of market penetration and market diversification, tiny economic scale that makes cost reduction difficult, tiny profit margin and the unavailability of SMEs' competitive superiority Rahmana et al. (2012).
In order to increase SMEs' competitiveness, the government and State-Owned Enterprises often encourage the growth of SMEs through SMEs, one of which is Environment Training Cooperation Program.As one major player in Indonesian economy, State-Owned Enterprises also concern themselves with SMEs development.
Based on that exposition, there is a need for a review on the model for SME development, in order to make SME to have competence and be able to compete with other kinds of enterprises in the future.

Previous Studies
Ambadar (2008) in Anatan (2009), states some motivations for an enterprise to implement social corporate responsibility and some expected results that an enterprise can gain: (1) the enterprise will be free from negative reputation that accuse the enterprise of being the destroyer of environment and of gaining shortterm profits without considerations for its negative actions, (2) the enterprise will have a sturdy ethical framework that helps managers and employees to solve problems such as the problem with job vacancy demands in the environment where the enterprise works, (3) the enterprise will receive gratitude and honors from core individuals of the society that needs the enterprise especially in terms of providing employment, (4) ethical attitude of the enterprise will create a safe working environment where the enterprise can operate without any interruptions.
Belkaoui (1989) in Anggraini (2006), reveals that: (1) social revealing has a positive relationship with social performance of an enterprise, which means the enterprise that has social activities will express the activities into a social report, (2) there is a positive relationship between social revealing with political visibility, in which big enterprises that are being watched tend to reveal social information compared to small enterprises, (3) there is a negative relationship between social revealing and the level of financial leverage, which means the higher debt/capital ratio, the lower social revealing will be.

SME and Its Development
SME, in general, is oriented towards the survival of the owners and their families, instead of the interest of the enterprise or business.That means SME is meant to fulfill survival interests beforehand by utilizing skills or competences that the owners have, to fulfill their life needs.Most SMEs do not pay attention to customers' interest, excpet for the understanding that the people in general buy their products.However, a small portion of the SMEs, by using their businesses, have already entered the dynamics of enterprise/business domain, in order to build market needs (developing various kinds of demands in the society) ( n. d.).Furthermore, he states the role of micro, small, and medium enterprises (MSMEs) in Indonesian economy can be seen, at least, from: (1) their place as the main players in the economy in many sectors, (2) their status as the largest employers, (3) their status as the important players in the development of local economy and the empowerment of the society, (4) their role as the creators of new markets and the sources of many innovations, and (5) their contributions in maintaining payment scale through their export activities.

CSR and PEDP
The concept of CSR emerges from the tendency in the industrial society, or DEAF phenomenon.DEAF is an acronym for Dehumanization, Equalization, Aquariumization, and Feminization (Suharto, 2006).(1) Industrial Dehumanization.Efficiency and mechanization are getting even stronger in the world of industry.Those two have created humanitarian issues for the working class in many enterprises as well as for the neighboring societies.The tendencies for enterprises to conduct mergers and cutting operational costs have created waves of discharge and unemployment.Moreover, expansion and exploitation by the world of industry have created a major damage to the environment, (2) Equalization of public rights.People nowadays seem to understand their rights to demand responsibility from the enterprises over social problems in the society caused by the operation of the enterprises.This conscience increases the pressure for enterprises to have accountability not only in the production process, but also in matters that is related to the enterprises' concerns towards several social problems that they have created, (3) Aquariumization of the world of industry.Work environ-ment nowadays is getting more transparent and opaque as it is an aquarium.Enterprises that focus solely on economical gains and tend to ignore other aspects, such as laws, principals, ethics, and philanthropic aspects, will not receive public support.Even in many cases, societies demand that this type of enterprise is to be closed, (4) Feminization in the work environment.Recently, more women receive employment in many enterprises.That phenomenon puts more pressure to enterprises to have concerns on matters other than economical gains, not only internally such as giving maternity leaves and enacting work safety acts, but also the emerging social costs, such as child neglects and youth mischief caused by the absence of mothers at home and in the society.Social services such as giving child care, constructing education and health facilities for children, or a sport and recreational centers for the youth can be seen as a form of social compensation for this issue.
According to Saidi and Abidin (2004) in Setiawan et al. (2008), there are four models of CSR scheme in Indonesia: (1) Direct involvement.Enterprises implement their CSR programs directly, by holding their own social events or by giving donations to the society without any intermediaries, (2) Through a charity foundation or social organization of the enterprise.Enterprises can establish their own charity foundations under the enterprises.This model adopts the common model of charity foundation from enterprises in the first world, (3) Partnership with other parties.Enterprises conduct their CSR programs, both in the management of budget and in the implementation of their social program, through partnerships with social foundations, government institutions/agencies, universities, or the mass media, (4) Supporting or joining a Consortium.Enterprises can establish, enroll as members, or support a social foundation that is established for a certain purpose or goal.
PEDP Partnership Program is a program to improve the competence of small enterprises so that they become tough and independent through the utilization of funding from the profits of SOEs.Environment Development Program is a program implemented by SOEs to empower social condition in the society within the business territory of SOEs through the utilization of funding from the profits of SOEs.
PEDP is expected to help SMEs in improving themselves.Furthermore, the program also attempts to give help to the society who wants to be utilized further.

SMEs Developed by the Bank of Sumatra Utara
The Partnership Program between SOEs with Small Enterprises, later is called the Partnership Program, is a program to improve the competence of small enterprises so that they become tough and independent through the utilization of funding from the profits of SOEs.
In their activities, PEDP are given to MSMEs in many forms, such as training, funding as their capital and for other matters.The Bank of Sumatra Utara cooperates with the Association of Street Vendors (ASV) of Medan to give the street vendors, as micro enterprises, guidance/training in form of sharing and discussion session.The training includes the methods in marketing, organization, and cooperation, thus increasing the insights of MSMEs entrepreneurs and enabling them to communicate to each other, and be able to overcome problems in the future.

SWOT Analysis
According to Rangkuti (2004), SWOT analysis is a process of systematically identifying various factors to formulize the strategy of an enterprise.This analysis is recommended on the idea that can maximize Strength and Opportunities, while at the same time, minimize Weakness and Threats.The process of deciding the right strategy for an enterprise is always related to the development of mission, objective, strategy, and the policy of the enterprise.
The following are the descriptions or the meanings of strength, weakness, opportunity, and threat: (1) Strength is superiority in terms of resources, competences and other skills that are relative to the competitors and the market needs of a market that is served or to be served by an enterprise, (2) Weakness is a limitation of or lacking in resources, competences and other skills that significantly hinders the efficient performance of an enterprise, (3) Opportunity is a major situation that benefits the environment of an enterprise, (4) Threat is a major situation that does not benefit the environment of an enterprise.
There is an instrument to arrange strategic factors of an enterprise, which is the SWOT Matrix.According to David (2006) in Meyliana (2010), SWOT Matrix is an instrument to match important matters that help the manager to develop four types of strategies: (1) SW (Strengths-Weakness) Strategy.A strategy that uses enterprise's internal power to exploit external opportunity, (2) WO (Weakness-Opportunities) Strategy.A strategy that is aimed to address enterprise's internal weaknesses by exploiting external opportunity, (3) ST (Strengths-Threats) Strategy.A strategy that uses enterprise's internal power to avoid or reduce the effect of the influence of external threats, ( 4) WT (Weakness-Opportunities) Strategy.A defensive strategy that is aimed to reduce enterprise's internal weaknesses and to avoid external threats.
SWOT can be drawn in the following matrix:

Design and Procedure of Research
This research is a developmental research, with the characteristic of the research is to be conducted gradually within two-year duration.
The research began with the collection of data (partnership scheme, funding scheme, and development scheme) that has been done by the related institution, which is the Bank of Sumatra Utara.

Data Collection Technique
Observations, interviews, and other efforts to collect the secondary data have been done as the techniques of data collection in this research.The collected data are as follows: (1) Problem identification was done by searching secondary data to the Bank of Sumatra Utara to discover the SMEs development scheme that the Bank has used for some time, (2) Strengths, weaknesses, opportunities, and threats of SMEs.Those data were collected through interviews with the related SMEs.Due to the limitations in funding, time, and author's capability, the number of related SMEs is determined to be only 5 SMEs.

Data Analysis Technique
The data of the research is analyzed by drawing and analyzing SWOT matrix that has been mapped.

RESULT AND DISCUSSION
After counting the EFAS and IFAS, the results were mapped in the following matrix: Whereas the results for IFAS and EFAS counting for SMEs guided by the Bank of Sumatra Utara were mapped in the following matrix:

SWOT matrix of SMEs Development Scheme by the Bank of Sumatra Utara and SMEs' SWOT matrix
Strength, weakness, opportunity, and threat that the SMEs Development Scheme by the Bank of Sumatra Utara has can be drawn into TOWS matrix.The following picture is the TOWS matrix of SMEs Development Scheme by the Bank of Sumatra Utara (Hasibuan, 2014) The following picture presents TOWS Matrix of SMEs (Hasibuan, 2014): The result from data analysis on SMEs development scheme by the Bank of Sumatra Utara reveals that the bank implements an aggressive strategy, which is beneficial to the bank due its possession of strengths and opportunities.The implemented strategy (growth oriented strategy) should be able to support aggressive growth policy.As stated in S-O strategy, the following actions can be implemented: (1) Increasing the operational range to attract more debtors; (2) Giving bigger rewards as incentives; (3) Giving business consultations in every aspects.
Most of the SMEs are spread over areas that are hard to be reached.The Bank of Sumatra Utara must reach those areas, for example by establishing branch offices in those areas.Furthermore, the bank must also expand the business consultation that is limited solely on financial aspects.If the Bank of Sumatra Utara cooperates with universities, the bank will be able to transfer the knowledge and the technology in those universities to the SMEs, for instance, the knowledge of production management and human resources management, so that SMEs can manage their enterprises as good as big corporations.
Financial limitation that the bank determined depends on the success of the enterprise and the debt repayment rate of the debtor.The solution is that SMEs must gain the trust of the bank, and the bank must encourage SMEs to utilize internet-based marketing to attract more customers, even customers in distant areas.As a regional bank, there are many opportunities for the bank since the society is more open to regional banks.The threat for the Bank of Sumatra Utara is the rising popularity of Shariah banks that are believed to share their profits to the banks' customers.The strategy to overcome this threat is to give motivations to SMEs to become debtors with adequate facilities.Most of the time, the customers have no concern with the price.They are concerned with the quality of the products including the given facilities, the service quality and convenience processes.
What the Bank of Sumatra Utara has done supports the development of SMEs.However, to optimize the result, improvements must be made by the bank.It is a responsibility of the world of banking to develop enterprises, including the SMEs.
The following are SMEs development scheme that the Bank of Sumatra Utara can do: (1) Giving courses/training in all aspects of management (financial, production, marketing and human resources) in order to make the SMEs able to manage their enterprises effectively and efficiently, (2) Starting cooperation with other institutions and universities in order to be able to transfer sciences and technologies that support enterprise management to the SMEs.

Strategy Management of the SMEs
According to the result of SMEs' EFAS and IFAS counting in S-O Matrix, the following are a strategy that the SMEs can implement: (1) Attending skill trainings to make high quality products, (2) Utilizing modern technology to increase production capacity, (3) Actively looking for exhibition on the internet to expand the marketing area, (4) Finding possibilities for alternative substituting natural resources According to strengths and weaknesses analysis on the SMEs, the result reveals that SMEs have a limitation in human resources management.If the Bank of Sumatra Utara cooperates with universities, the academics will be able to help to improve the quality of the human resources in those SMEs.Another limitation is in the production process, in which the SMEs merely utilize simple production process for they have no knowledge on effective production management.Although they produce high quality products, SMEs lack consistency in maintaining their products.Another limitation is in marketing management.In this era of computer technology and the internet, different kinds of people from different parts of the world can interact.People do not need to visit a store to shop anymore; instead they can purchase products online.However, SMEs have not utilized the internet to market their products.If they can manage to market their products on the internet, SMEs will be able to expand their market.
For SMEs that receive raw materials from the nature, it is suggested that they find another source of alternative resources, for the natural resources will be depleted one day.There is a need to find or even create substituting resources.SMEs also need to establish cooperation with several suppliers to ensure the availability of raw materials.SMEs also need to follow up with the age of information technology, for instance the internet, which has provided various kinds of information that the SMEs need.Cooperation with several institutions is also needed for the SMEs to gain more important information such as exhibitions.
For some SMEs that have increased their production capacities, they should change their production method with more advanced pro-duction technologies.The universities can help in this matter for their inventions and more advanced production technologies/machines can help the SMEs.Moreover, SMEs must be able to maintain their and improve the quality of their products.They also need to determine fair prices to customers.Benchmarking, in terms of quality, design, pricing, packaging etc., with similar SMEs can be a solution.
Thus, the development model for SMEs is: (1) Attending training in enterprise management (financial, marketing, production, and human resources), (2) Improving the quality of products and services, (3) Benchmarking with other similar SMEs that have wider market.

CONCLUSION
The results of the study can be concluded as follows: (1) SMEs Development Scheme by the Bank of Sumatra Utara is an aggressive strategy that has opportunities and strengths to utilize available opportunities, (2) The condition of the researched SMEs is an aggressive strategy that has opportunities and strengths to utilize available opportunities, (3) The following are the development models for SMEs that the Bank of Sumatra Utara can implement: • Giving courses/training in all aspects of management (financial, production, marketing and human resources) so that the SMEs will be able to manage their enterprises effectively and efficiently • Establishing cooperation with other institutions and universities in order to transfer sciences and technological advantages to support the SMEs in implementing their enterprise management

Picture 1 :
Diagram of SWOT Analysis(Rangkuti, 2005) enterprises' usage of more advanced production technologies -Higher quality products of the competitors -The decline of income in the society that affects buying power -Rising oil price that affects production cost -The popularity of cheaper imported products -Declining value of Rupiah that affects the price of raw materials -The decline of the supply of raw materials from the environment -The view of the society on SMEs' products as low quality products S. SWOT Matrix of Small and Medium Enterprises Lailan Safina Hasibuan / An Analysis on SME Development Model (A Study on the Development of SME) / JEE, Vol. 6, No. 2, September 2017, pp 79 Hadisoegondo, is Partnership and Environment Development Program operated by State-Owned Enterprises (SOEs) through the utilization of funding from the profits of SOEs.The amount of allowance to fund the Partnership Program is maximum 2% (two percent) from the net profit, and the amount of allowance to fund the Environment Development Program is maximum 2% (two percent) from the net profit.PEDP is a form of responsibility from the State-Owned Enterprises (SOEs) to the society.The legal foundations for SOEs to implement PEDP are based on the Law Number 19 of 2003 Concerning State-Owned Enterprises and the Ministerial Regulation Concerning SOEs Number Per-05/MBU/2007 that state the intention and the purpose of SOEs' establishment as the enterprises that are not only to gain profits but also to actively guide and help low-class entrepreneurs, cooperation enterprises, and the society.