Kemenkop UKM Temporarily Suspends Savings And Loan Cooperative Business Licenses

Secretary of the Ministry of Cooperatives and SMEs Rully Indrawan. (Photo: Kemenkop UKM)

JAKARTA - The Ministry of Cooperatives and SMEs issued a moratorium or temporary suspension of licensing for savings and loan cooperatives for the next three months. The license moratorium is contained in Circular Letter Number 26 of 2020 concerning Moratorium on Licensing for Cooperative Savings and Loans Businesses.

Secretary of the Ministry of Cooperatives and SMEs Rully Indrawan said this step is to maintain the continuity and health of cooperative savings and loans businesses in Indonesia.

"The policy for the temporary suspension of granting savings and loan business permits to cooperatives is valid for three months from the date the letter was signed, namely from May 29, 2020," Rully said in a written statement quoted on Friday, June 19.

However, continued Rully, when the circular letter was issued, the application for a cooperative savings and loan business license that had been submitted was still being processed in accordance with the provisions of the legislation.

"The current moratorium needs to do a temporary review regarding the licensing of cooperative savings and loans. In addition, there are still cooperatives that carry out savings and loans businesses that do not comply with the cooperative's basic principles and values as well as applicable regulations, causing problems for members and the community," he said.

Deputy for Supervision of the Ministry of Cooperatives and UMKM, Akhmad Zabadi, explained that this moratorium would be used by his party to make improvements in the integrated supervision system with related parties.

"Thus, better supervision is expected to be able to maintain the continuity of the cooperative savings and loan business," he said.

Pagebluk COVID-19, according to him, caused many savings and loan cooperatives to experience liquidity or capital problems due to decreased loan installment payments and withdrawal of member savings.

Does #SobatKUKM already know the various benefits that will be obtained if you set up a cooperative? If you don't know, let's listen. # ReadyBersamaKUMKM # KoperasiKeren pic.twitter.com/dmrGqJCiJ1

- The Ministry of Education and Culture (@CoofSchool) June 4, 2020

"This will cause unrest and cause the image of the cooperative to become unfavorable in the eyes of the community," he concluded.

Therefore, it is necessary to conduct an evaluation in order to restore public trust in cooperatives. As for now, cooperatives are not only under the supervision of the Ministry of Cooperatives and UKM, but also local governments.