<![CDATA[This study analyzes the effect of Village Funds on poverty alleviation in Subulussalam City, Aceh Province, Indonesia, with a case study in Simpang Kiri District. The study was motivated by the fact that the increase in Village Fund allocations to Subulussalam City in 2024 was accompanied by an increase in the number and percentage of poor people. The study used a quantitative approach with primary data collected through questionnaires, observations, and interviews. The sample consisted of 101 poor residents of the 17 villages in Simpang Kiri District, selected by purposive sampling with the criterion of a per capita income below IDR 487,777 per month. The data were analyzed using multiple linear regression, with the use of Village Funds for village development (X1) and for community empowerment (X2) as independent variables and poverty (Y) as the dependent variable. The results show that Village Funds for development have a negative but insignificant effect on poverty (coefficient −0.031; sig. 0.673 > 0.05), whereas Village Funds for community empowerment have a negative and significant effect on poverty (coefficient −0.515; sig. 0.000 < 0.05). Simultaneously, the two variables have a significant effect on poverty (F = 243.868; sig. 0.000), with a coefficient of determination (R²) of 0.834. These findings indicate that Village Funds reduce poverty mainly through community empowerment rather than through physical development. The study recommends that the government strengthen oversight of the use of Village Funds and increase the share of Village Funds allocated to community empowerment programs.]]>
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