<![CDATA[This study investigates the role of traditional sanctions in the management of credit issues within the Lembaga Perkreditan Desa (LPD) in Karangasem, Bali. Using a qualitative approach, this research relies on library research and literature review to explore how adat law, specifically the "Kasepekang" sanction, is applied to borrowers who default on their loans. The research examines the effectiveness of this traditional sanction in maintaining the stability of the LPD's financial operations and ensuring compliance with the credit agreements. It also investigates the relationship between local cultural norms and formal financial systems, particularly in the context of credit management in Bali. The study finds that while the application of "Kasepekang" can enforce compliance and prevent further defaults, it also raises concerns regarding its fairness and potential violation of human rights. The research further highlights the challenges faced by LPDs in balancing traditional practices with modern legal frameworks, suggesting the need for more comprehensive regulations to guide the implementation of such sanctions in financial institutions. This study contributes to a deeper understanding of how cultural and legal elements intersect in the operation of community-based financial systems, and offers insights into improving the governance and sustainability of LPDs.]]>
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