The Microfinance Institution and Alleviation of Poverty in an East Java']Java Village, Indonesia

Women's cooperatives in rural areas are one of the microfinance institutions that provide financial services to the poor and low-income people. One of the East Java Provincial Government programs in 2010 and 2013 was to provide grants to women's cooperatives to empower women in rural areas. For that purpose, research based on qualitative data collection method was conducted in October 2016 to May 2017, focusing on a women's cooperative in Magersari Village, Plumpang Sub-district, East Java. This research aims to analyze whether the presence of a women's cooperative could alleviate poverty in rural areas. The sample used in this study chose one of the women's cooperatives which are considered successful by the government. In conclusion, that cooperative's loan was used to fulfill the needs of daily living, to pay children's education tuition fees, to purchase agricultural input, and to increase capital for productive businesses, among others. Based on the analysis of the cooperative's loan usage pattern, we can conclude that the existence of a women's cooperative could empower women because it could contribute to children's education, improve farming activity and increase business productivity. But, on the other hand, the loan provided by the cooperative also causes increased amount of debt. Thus, the existence of cooperatives that provide financial services for women is a process in alleviating poverty in rural area.