Prabowo Holds Ratas In Hambalang To Discuss Kopdes Financing Scheme

Minister of Cooperatives Budi Arie Setiadi (right) at a press conference in Jakarta, Monday (23/6/2025). (ANTARA/Shofi Ayudiana)

Minister of Cooperatives Budi Arie Setiadi stated that there would be a limited meeting at President Prabowo Subianto's residence in Hambalang, West Java, to discuss a funding scheme for the Red and White Village Cooperative.

Budi Arie said this meeting was held to ensure the smooth development and operation phase of the Red and White Kopdes after the stages of institutional establishment and legality of cooperatives were completed.

"This is what I want to have a meeting in Hambalang about development, operation. Later, after that stage, it will enter the monitoring and evaluation stage, including formulating, developing the potentials that exist in each Kopdes," said Budi Arie as quoted by ANTARA, Monday, June 23.

The target for the formation of 80 thousand Red and White Kopdes has been achieved 100 percent. The next step is the legalization of cooperative legal entities at the Ministry of Law, which is targeted to be completed by the end of June 2025. The next stage is operationalization which will start from July to October.

Previously, Budi Arie said the budget needed for the formation of 80 thousand Kopdes Merah Putih was estimated at IDR 400 trillion.

As initial capital, the government will provide a ceiling of up to IDR 3 billion per cooperative unit. This fund is not a grant, but in the form of a loan from the Association of State-Owned Banks (Himbara).

Each cooperative is obliged to repay the loan through an installment mechanism with a tenor of six years. However, a number of parties are worried that this financing model could increase the risk of bad credit figures (NPL) of banks.

The financing scheme through loans from Himbara banks which will then be paid in installments using village fund allocations is also feared to potentially burden village fiscals in the long term.

The latest data from the Financial Services Authority (OJK) shows that NPL increased from 2.08 percent in December 2024 to 2.17 percent in March 2025, while the number at risk increased to 9.86 percent in March 2025 from 9.28 percent in December last year.