State Banks to Lend Rp 240 Trillion for Indonesia's Village Cooperatives
Jakarta. Indonesia's state-owned banks will provide up to Rp 240 trillion ($13.3 billion) in financing to support the nationwide rollout of the government's Red-and-White Village Cooperatives, Finance Minister Purbaya Yudhi Sadewa said on Thursday.
Speaking in Yogyakarta, Purbaya said the financing, to be disbursed through the Association of State-Owned Banks (Himbara), will allow each cooperative to borrow up to Rp 3 billion with a six-year tenor.
Although the loans will come from state-owned lenders, the government will repay both the principal and interest over the six-year period, he said.
"It (the loans) will amount to around Rp 40 trillion per year, depending on the number of cooperatives in operation," Purbaya said while handing over electric pedicabs in Yogyakarta.
He said funding would not be the main challenge for the program. Instead, ensuring transparent implementation and minimizing corruption would determine its success.
He added that the Cabinet had decided that all government-subsidized essential goods would be distributed exclusively through the Red-and-White Village Cooperatives, giving them a sustainable source of business.
"From that alone, the cooperatives will already have profitable business opportunities, provided there is no corruption," he said.
The policy is expected to strengthen the financial viability of the cooperatives while expanding their role as distribution hubs for subsidized goods at the village level.
The Red-and-White Village Cooperative program is one of President Prabowo Subianto's flagship rural development initiatives. The government aims to establish around 80,000 cooperatives across the country during his presidency to improve food distribution, expand access to financing, and stimulate local economic activity. The government has allocated Rp 83 trillion for the program this year.
Authorities aim to establish 80,081 cooperatives nationwide by 2029. Around 11,000 have been established so far, with about 1,000 already in operation.
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