ABSTRACT The National Program for Community Empowerment in Rural Areas (PNPM MPd) has ended. However, the end of the National Program for Community Empowerment in Rural Areas (PNPM MPd) left the question about the preservation of the program output in the form of revolving funds, including and the development of Financial Management Unit (UPK) PNPM MPd in all parts of Indonesia including UPK PNPM MPd Cangkringan. The transformation into microfinance institution (MFI) can be used as an alternative option in the rescue efforts and the development of UPK PNPM MPd Cangkringan and preservation revolving funds under its management in the future. The purpose of this study to identify factors - external and internal factors, formulate strengths, weaknesses, opportunities and challenges, as well as provide recommendations on feasible strategies and can be done to develop UPK PNPM MPd to be MFI in Cangkringan. The identification of external factors done by analyzing aspects of political, economic, social, technology, nature, stakeholders, as well as collaborators and competitors that subsequently resulted in the formulation of the opportunities and challenges. The dentification of internal factors by analyzing aspects of the resources (inputs), strategy (process), and performance (output) resulted in the formulation of strengths and weaknesses. While, the formulation of the strategy is done through a SWOT analysis and Litmus Test. This study applied descriptive qualitative approach. The sampling technique in this research is purposive sampling and the data used are primary data and secondary data collected by in-depth interviewing, document analysis and observation. The validity of the data applied the data trianggulation technique namely source triangulation. The research reveals that there are five strategies that can be done in the development of UPK PNPM MPd Cangkringan to be MFIs. The five strategies are the perception of stakeholders and the design creation roadmap UPK development into MFI, the combination of moneylending and community fund-raise performance, human resource development committee for microfinance governance to be more professional, the capacity development of key stakeholders at the district and village levels about the establishment and management of professional micro finance, and encourage the role of local government through the policy in clarifying the future of UPK. Keywords: strategy, UPK development, PNPM Rural, MFI.