From Waste to E-Money: The Role of Village-Owned Enterprise in Community Empowerment in Jember, Indonesia

Abstract

Waste management is a significant global challenge as waste volumes increase worldwide. International organizations like UNEP and the World Bank promote the circular economy and 3R (reduce, reuse, recycle) principles to mitigate waste's environmental impact. In Indonesia, similar challenges arise, notably in Jember Regency, which produced 370,362 tons of waste in 2022, making it the second-largest contributor in East Java. This reflects broader waste management issues in developing countries, where infrastructure and public awareness remain limited. This study examines the role of BUMDes (Village-Owned Enterprise) in empowering communities through a waste-to-electronic-money program. This innovative approach not only supports sustainable waste management but aligns with global trends of incentivizing waste management through financial rewards, as seen in countries integrating waste management with the digital economy. By converting waste into electronic money credit, the program addresses waste issues while promoting economic empowerment. A qualitative approach was employed, with data collected through observation, interviews, and documentation. An interactive model was used to analyze how the BUMDes waste management system integrates with the global circular economy framework. The results of the study indicate that BUMDes plays an important role in adopting community-based innovations that not only reduce waste volume but also encourage economic empowerment through financial incentive mechanisms. developing community potential, improving the regional economy, improving the institutional framework, and encouraging environmental sustainability through processing waste into electronic money.