Cooperative Ministry Strengthens Cooperatives as Microcredit Alternative

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation
Date 30 Agustus 2021
Category: News
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Minister of Cooperatives and MSMEs Teten Masduki (Photo by: BPMI of Presidential Secretariat)

Minister of Cooperatives and MSMEs Teten Masduki has expressed commitment to continue to strengthen cooperatives as a microcredit alternative for microbusinesses.

According to him, it is part of the measures to eradicate loansharking and loans from illegal cooperatives.

“We are currently eyeing cooperatives. (They) can be microbusinesses’ partner in financing,” the Minister said, quoted from the official website of Ministry of Cooperatives and MSMEs, Monday (08/30).

According to him, cooperatives can be a credit alternative for microbusinesses considering the number of cooperatives in Indonesia is quite high.

He also said that based on the data from a recent survey carried out by state-owned bank BRI and financing company PNM, 30 million microbusiness units have not been connected to formal financial agencies, adding that although the Government has provided people’s business credit (KUR) up to Rp100 million without collateral, in practice, banks that distribute the credit often ask for collateral.

“That is why loan sharks exist. They work progressively with suffocating interests. Although it is fast, it still causes disadvantages. Here we see cooperatives as an affordable and easy finance alternative,” he said.

Teten also acknowledged that at the onset of the COVID-19 pandemic in Indonesia last year, there were concerns that cooperatives would fall and the people’s income and revenue would decrease because many cooperative members would withdraw their savings.

Nevertheless, he added, cooperatives survived anyway.

“In the national economic recovery (PEN) program, we give cooperatives capitals, especially saving and loan cooperatives. Thank God, those concerns remain as concerns. The PEN program is right on target,” he said, adding that cooperatives can play a role as microcredit distribution alternative and encourage businesspeople to expand their economic scale.

“Cooperatives are not only loan (providers) but also consolidators and aggregators of microbusinesses to expand their economic scale,” he remarked. (PR of Ministry of Cooperatives and MSMEs/UN) (DH/EP)

The official website of Ministry of Cooperatives and MSMEs can be accessed through this link.

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