Jakarta. The sovereign wealth fund Danantara will finance the Merah Putih rural cooperatives, according to a minister, as Indonesia seeks to boost its grassroots economy.

A few months ago, President Prabowo Subianto launched the 80,081 rural cooperatives across the archipelago, among others, to cut the food distribution chain. Cooperatives Minister Ferry Juliantono said that Danantara, which had all state-owned banks under its wings, would back the program to make it easier for these enterprises to gain financing. Ferry said that ministries of finance, cooperatives, home affairs, villages, as well as the State-Owned Enterprise Regulatory Body would sign a joint decree for this Danantara financing on Thursday.

“This joint decree will open access for Danantara to finance the Merah Putih cooperatives,” Ferry told the 2025 Investor Daily Summit in Jakarta.

According to Ferry, this legal framework is necessary as banks tend to prioritize large-scale borrowers or corporations. 

"Banking mechanisms then provide more business opportunities to, sorry, corporations. Those in the rural areas turned to just ‘objects’,” Ferry said.

The minister said Prabowo had mandated the strengthening of Red and White Cooperatives as part of Indonesia’s new economic order. This aligns with the 1945 Constitution, which states that the economy is structured on the principles of family and togetherness. This puts cooperatives as a key pillar in Indonesia’s economic democracy, thus the need for such enterprises to catch up with state-owned companies and private businesses.