The purpose of this study is to investigate the contiguity of social capital and competence on business performance moderating by government policy. A total sample of 225 Village Credit Institution (LPDs) managers in Bali, the hypothesis is examined using the WarpPLS analysis. The findings reveal that social capital has an important role in enhancing performance, Competence is also an important factor for managers because it can intensify performance. Social capital is largely related to the recognition of society regarding the credibility of the managers, while competence emphasizes the ability of the managers to manage the organization. Government policy must be viewed as a regulation that is able to help improve performance. However, the public policies issued by the government are still unable to help improve social capital and competence. Thus, to create public policies that are able to improve the competence and social capital, a further examination into the variables must be conducted. The findings suggest that two-way communication must be developed and synergy between the government and organizations to create opportunities and overcome the increasingly complex business challenges. The results emphasized the importance of social capital in enhancing business performance. In addition, the role of competence is of equal importance to enhance business performance.

Abstract
1. Introduction
2. Literature Review
3. Methodology
4. Results
    4.1. Evaluation of the Analysis Model
    4.2. Path Analysis and Hypothesis Test
5. Discussion
6. Conclusion
References

• Made Gde Sudharma SANTOSA(Faculty of Economics and Business, Udayana University)
• Wayan Gde SUPARTHA(Departement of Management Faculty of Economics and Business, Udayana University)
• I. Gede RIANA(Departement of Management, Faculty of Economics and Business, Udayana University) Corresponding Author
• I. B. Ketut SURYA(Departement of Management Faculty of Economics and Business, Udayana University)