The Social Capital of Trust and Its Role in StrengtheningThe Small Business Economy of Roasted Peanutsin Kawangkoan, Minahasa

Abstract

The existence of small business in the community supported by strong social capital will have positive contribution for the viability of small businesses. It has been proven during the 1998 monetary crisis. Aftermath the crisis, the government and the economists recognized that the Indonesian economy survived from severe collapse because of the strength and the sustainability of millions small businesses and other traditional economic activities. During the 1997 national economic crisis which shook the social, economic and political stability, the big industrial activities suffered from the worst impact. The number of large industries dropped from 2,097 to 1,831 in 1998 while small industries sustained their business activities. From 225,000 SMEs, 64.1% of them survived and were able to grow as much as 0.9%. Meanwhile, 31.0% decreased their business activities, and 4.0% were forced to stop their business activities. Thus, it has been proven that small business cannot be underestimated. Similar phenomenon also occurs in roasted peanut small business in Kawangkoan. The businesses which emerge and grown within the society still have strong existence despite the fierce competition with modern roasted peanut business.The purpose of this study is to know and describe the social capital of trust and its role in strengthening the small business economy of roasted peanuts in Kawangkoan, Minahasa.This research uses qualitative research method with case study.The primary data sources are obtained from informants, events and documents in 2016. Data collection techniques uses triangulation in the form of observation, interview and documentation. Data analysis uses Domain analysis and Taxonomy analysis. The results show that trust as the social capital has important roles embodied in some aspects as followsthe supply of raw materials with excellent quality from the farmers, openness, honesty, loyalty, seeds from the business owners to the farmers, agreement-based payment system, giving allowance and bonus, ‘Laku Bayar’ as the payment system, exchanging information, well-maintained characteristics of the products, free-chemicals products.