The Indonesian government aims to provide financing to 20,000 village cooperatives this year as part of a broader push to operationalize 80,000 co-ops nationwide, Cooperatives Minister Ferry Juliantono said on Thursday.
Each cooperative will be eligible for up to Rp3 billion (around US$182,000) in financing, which can be used for working capital or infrastructure investments such as storage facilities and operational trucks.
To accelerate disbursements, the government is revising Finance Ministry Regulation No. 49/2025 on cooperative lending procedures. The revision will cut red tape by eliminating requirements such as approvals from regional heads and village meetings for every business proposal.
The ministry will also launch outreach programs with local offices, state-owned enterprises, and disbursing banks to ensure cooperative managers understand proposal and disbursement standards.
So far, 1,064 cooperative proposals have been submitted to state-owned banks, with 100 already operating as pilot projects.
The government has allocated Rp16 trillion (US$970 million) from the 2025 state budget’s excess funds to support financing for cooperatives under the Red-and-White Cooperatives Program. The funds will not be distributed directly to co-ops but placed in banks appointed by the government, particularly state-owned lenders.
The financing drive is part of a broader agenda to expand access to credit for rural enterprises, strengthen local economic resilience, and reduce reliance on informal lending channels.
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Translator: Shofi Ayudiana, Martha Herlinawati Simanjuntak
Editor: Anton Santoso
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