As an aggregator and economic accelerator for members, cooperatives have the potential to provide many benefits.Jakarta (ANTARA) - Cooperatives have an important role as drivers of economic recovery considering Indonesia had around 127,846 cooperatives with 27.1 million members in 2021, Cooperatives and Small and Medium Enterprises (SMEs) Minister Teten Masduki has said.
"The total assets of all existing cooperatives are Rp250.98 trillion, with a business volume of Rp182.35 trillion," he informed in a written statement issued here on Tuesday in response to a query from ANTARA.
The ministry, he said, is seeking to develop modern cooperatives by strengthening several facilitations, including the facilitation of assistant staff; access to financing from the Cooperative Revolving Fund Management Agency for Micro, Small, and Medium Enterprises (LPDB-KUMKM) and the Association of State-Owned Banks (Himbara); partnerships; off-takers/suppliers; and technologies and innovations.
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The government is also encouraging cooperatives to access capital and financing from alternative banking and non-banking sources, he added.
This support covers the provision of clustered People's Business Credit (KUR) at a competitive interest by banks to cooperative members, as well as access to LPDB-KUMKM financing with a mandate to distribute 100 percent funds to cooperatives so that they have sufficient liquidity to produce and provide financing to members.
"As an aggregator and economic accelerator for members, cooperatives have the potential to provide many benefits,” Masduki said.
However, cooperatives are facing many challenges, including slow business development while corporations run fast, he pointed out. Then there is also a lack of community participation in cooperatives’ membership, which is currently pegged at 8.41 percent, below the global average of 16.31 percent, the minister added.
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Further, there are a number of cooperatives that are facing problems such as Intidana Savings and Loan Cooperative (KSP), KSP Sejahtera Bersama, KSP Indosurya Cipta, Lima Garuda Cooperative, KSP Pracico Inti Sejahtera, Pracico Inti Utama Sharia Financing Savings and Loans Cooperative (KSPPS), Jasa Wahana Berkah Sentosa Cooperative, and KSP Timur Pratama Indonesia, Masduki noted.
"Troubled cooperatives have an impact on members who will find it difficult to disburse funds, up to Rp26 trillion," he added.
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Translator: Katriana
Editor: Fardah Assegaf
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