"With the law of financial sector development, cooperatives can pursue many businesses in many financial services sectors, ranging from bank, insurance, stock, and other businesses that have yet or have been regulated in the law about financial services," Deputy of Cooperatives at the Ministry Ahmad Zabadi stated here on Friday.
The law allows cooperatives to establish banks within their legal capabilities, he remarked. Moreover, the cooperatives can create insurance companies and stocks company, he added.
"Thus, there is no limitation. Cooperatives can now surely have the same opportunity just like other businesses," he elaborated.
Zabadi drew attention to four main agendas that should be prioritized in the implementation of the ongoing law, with the first being improvement in monitoring, while the second is the verification of cooperatives' savings and loans' businesses as outlined in the law.
"The third being development of an integrated monitoring system as the embryo of the Cooperatives Monitoring Authority formulated in the Draft Bill on Cooperatives, and lastly, is the formation of the Cooperatives Monitoring Authority itself," he explained.
Zabadi noted that the ministry has at most two years to conduct assessment of all cooperatives. This aims to classify which ones are engaged in the financial services sector and those only catering to its members, he stated.
"Hence, for cooperatives that only serve their members and offer savings and loans will be under the Cooperatives and Small, Medium Enterprises Ministry's monitoring, whereas cooperatives that also serve people other than their members will be monitored by a relevant agency, like the Financial Services Authority (OJK)," he explained.
As a follow up, the ministry has also issued Cooperatives and MSMEs Ministry Regulation Number 8 of 2023 about cooperatives' savings and loans service that had come into effect since June 27, 2023, he remarked.
The regulation is aimed at accommodating the legal needs of people and cooperatives members in order to ensure good and professional cooperatives management that can improve the establishment and its members, he concluded.
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Translator: Kuntum Khaira R, Mecca Yumna
Editor: Azis Kurmala
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