House Panel Highlights Cooperatives Paying Village Fund Loans Before Receiving Capital

Some Red and White Village Cooperatives in Indonesia have begun paying installments from Village Funds even though they have not received business capital or started operating, a lawmaker said.

Zulfikar Hamonangan, a member of the House of Representatives’ Commission VI, raised the issue during a working meeting with Cooperatives Minister Ferry Julianto in Jakarta on Tuesday, Sept. 1. He cited conditions in Greater Tangerang, which he represents, where around 350 Red and White Cooperatives have been established or are operating. Nearly half, he said, have yet to receive business financing.

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It's like someone has taken out a car loan, but the car has not arrived, and they still have to make the payments. They have not even enjoyed the vehicle, yet they must start paying installments through Village Funds. This must be resolved.

Zulfikar attributed the delays in part to cooperatives that have not completed renewed surveys or entered online data collection needed to obtain financing support. He said the situation had become a problem because repayment periods funded through Village Funds had already begun while the cooperatives’ businesses remained inactive.

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Please set aside activities with young people related to cooperatives, understanding cooperatives, and the role of young people in them.

“It's like someone has taken out a car loan, but the car has not arrived, and they still have to make the payments,” Zulfikar said. “They have not even enjoyed the vehicle, yet they must start paying installments through Village Funds. This must be resolved.”

He also called on the ministry to set aside training funds specifically for young people, including Generation Z. He said young people's interest in cooperatives remained low because they had not seen a clear economic opportunity. Zulfikar further urged the cooperatives to do more than act as retailers for major companies or state-owned food firms. Instead, he said, they should collect agricultural, plantation, livestock and fisheries products from villages, buy them from local producers and distribute them to state food agency Bulog. “The Red and White Cooperatives should buy agricultural and livestock products from each village, then sell them to Bulog,” he said.

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The Red and White Cooperatives should buy agricultural and livestock products from each village, then sell them to Bulog.