"The biggest challenge for MSMEs now is operating amid many limitations, which leads to high production cost, low productivity, and limited access to market and financing," the ministry's Deputy for Micro Enterprises, Riza Damanik, noted in a statement received here on Thursday.
He highlighted that cooperatives are the most practical solution to address these problems, as MSMEs would be able to obtain market certainty, access to raw materials, and opportunities for rapid growth through the village cooperatives.
According to Damanik, the village cooperatives consolidate the strengths of MSME entrepreneurs to achieve the economies of scale necessary for surviving and thriving amid competition.
Through cooperatives, he further noted that MSMEs that earlier operated individually can form organized business clusters, gain easier access to financing, obtain raw materials at lower cost, expand their marketing networks, and embrace technological innovation and partnerships.
He explained that MSMEs and cooperatives should not be seen as competitors, but rather as parts of a mutually reinforcing ecosystem.
This model is deemed able to help MSMEs secure sufficient production volumes, reduce operational costs, and achieve consistent quality standards.
Furthermore, the village cooperatives have strong potential to promote superior products of regions, from agricultural commodities to fishery products and local crafts.
He said these products can be integrated into the cooperative system to gain broader market access.
According to Damanik, this step will not only increase the added value of the products but also open up opportunities for Indonesia to establish cooperatives among the largest in the world.
President Prabowo Subianto officially launched around 80 thousand village cooperatives nationwide under the Red and White Village Cooperatives program in Klaten District, Central Java, on July 21.
The cooperatives are envisaged as hubs of economic and social services in village communities, offering savings, loans, and clinic services, among others.
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Translator: Arnidhya Nur, Raka Adji
Editor: Arie Novarina
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