Jakarta (ANTARA) - Efforts must be intensified to achieve the goal of making co-operatives the nation's economic foundation and the dominant force in the national economy, Co-operatives and Small and Medium Enterprises Minister Teten Masduki has said.

"Today, Indonesia's co-operatives reach only 8.41 percent (of the national population), while some 16 percent of the population at the global level is participating in co-operatives," Masduki pointed out at a public lecture hosted by the University of Indonesia's Economics and Business Faculty, which was followed online from here on Friday.

According to the ministry’s data, Indonesia had 127,846 co-operatives with a total of 27.1 million members and total assets of Rp250.98 trillion in 2020, he noted, adding that the number is relatively small compared with some major national corporations.

The resilience of co-operatives was witnessed during the 1998 economic crisis, when many private banks and financial institutions collapsed due to a bank run, while savings and loans co-operatives survived the crisis as their members did not withdraw their assets, he explained.

"The might of co-operatives is that everyone participating in the co-operatives is automatically the owner, hence, they become their own master and have trust in fellow members," Masduki said.

Despite this resilience, an anomaly was noticed during the COVID-19 pandemic, when eight savings-and-loans co-operatives defaulted, he added.

He said that his current task is to develop a good and mature co-operative monitoring ecosystem to parallel with the Financial Services Authority (OJK), which monitors banks and addresses banking insolvency cases.

Co-operatives have no such monitoring institution. This will be my homework: to revise the law on co-operatives to improve its ecosystem," the minister informed.

Following a meeting with the OJK, the ministry is pushing co-operatives practicing shadow banking to establish themselves as fully fledged banking institutions, thereby paving the way for OJK supervision of the institutions.

Otherwise, they will be asked to restrict their activities to comply with co-operatives’ principles, he added.

"Co-operatives cannot operate as they please, and we will disband co-operatives continuing their shadow banking activities," Masduki remarked.

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Translator: M Baqir Idrus A, Nabil Ihsan
Editor: Sri Haryati
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