<![CDATA[This study examines the implementation and legal certainty of mortgage-backed credit at the Village Credit Institution (Lembaga Perkreditan Desa, LPD) of Canggu Customary Village, Bali. The central issue is the tension between Article 9 of Law No. 4 of 1996, which limits holders of Mortgage Rights to individual persons or legal entities acting as creditors, and the LPD's status as a customary-village-owned financial institution that is not expressly designated as a legal entity in the national legal system. Using empirical legal research, the study combines sociological, statutory, and conceptual approaches with interviews, observation, and documentary analysis. The findings show that LPD Canggu applies a structured lending process comprising credit application, debtor and collateral assessment, credit agreement, execution of SKMHT and APHT before a Notary/PPAT, and registration at the Land Office. When default occurs, the LPD prioritizes deliberation, restructuring, and voluntary collateral takeover (AYDA) rather than auction. Operational practice therefore demonstrates social effectiveness but remains normatively uncertain. Clearer legislation is required to define the LPD's legal capacity within the national Mortgage Rights regime while preserving its customary institutional character.]]>
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