"The moratorium is enforced for the establishment of new savings and loan cooperatives and for existing savings and loan cooperatives seeking to open new branch offices," the ministry's Deputy for Cooperatives Affairs Ahmad Zabadi noted, as per the statement here Friday.
Zabadi remarked that the current circular on the savings and loan cooperatives moratorium aims to continue the moratorium enforced through Ministry's Circular No. 11 of 2022, valid for a three-month period since its issuance on November 17, 2022.
The decision to freeze the issuance of savings and loan cooperatives licenses was taken to address the abuse of such cooperatives by their operators.
"The ministry also found that there are cooperatives with savings and loan function that did not (perform their business) according to the principles of cooperatives and prevailing laws," Zabadi stated.
As more time would be needed to address the issue, the ministry decided to extend the moratorium that will affect the establishment of new savings and loan cooperatives and new branches of existing cooperatives, he remarked.
Zabadi stated that apart from enforcing the moratorium policy, the ministry is also drafting a ministerial regulation on savings and loan aspects in cooperatives that will be issued soon.
Earlier, Minister Teten Masduki proposed the establishment of an authority body to oversee activities of and ensure deposits in cooperatives through the revision of relevant laws.
"Medium- and large-scale savings and loan cooperatives must have an oversight agency, similar to OJK (in the banking sector), but specialized for cooperatives. The United States and Japan already have such agencies," he had stated on Wednesday (February 8).
Masduki highlighted the urgency of an oversight agency for cooperatives to protect their members, as larger cooperatives handle multiple financial transactions, yet the current Cooperatives Law is inadequate.
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Translator: Kuntum Khaira R, Nabil Ihsan
Editor: Rahmad Nasution
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