Indonesia Finalizes Regulation to Boost Village Cooperatives

KBRN, Jakarta: The Indonesian government is finalizing a new regulation that will expand business opportunities for the Merah Putih Village Cooperatives (Koperasi Desa/Kelurahan Merah Putih-KDKMP). The policy is expected to become a milestone in strengthening community-based economic development across the country.

Deputy Minister of Cooperatives Ferry Juliantono confirmed that the operational regulation for KDKMP is nearing completion. he said after an evaluation meeting in Jakarta, Thursday (4/9/2025), the cooperatives in line with industrial classification.

“All relevant ministries and institutions are now preparing regulations that will reduce risks for cooperative activities. The cooperatives in line with their Indonesian Standard Industrial Classification (KBLI) that can distribute fertilizer, serve as retailers of three-kilogram LPG cylinders, and even operate pharmacies,” he said.

Moroever, Ferry added that implementation will begin soon. “By next week, everything will be ready. We will distribute pocket book guidelines to cooperative managers across the regions so they can immediately follow the technical instructions,” he stated.

The government has also allocated strong financial support through Minister of Finance Regulation (PMK) No. 6.3/2025, which continues the previous PMK No. 4.9 on funding sources for village cooperatives. A budget of IDR 16 trillion (approximately USD 1 billion) has been allocated and will be disbursed through four state-owned banks under Himbara: BNI, BRI, Bank Mandiri, and BSI.

According to Ferry, the banks have prepared a manual book detailing the disbursement procedures. He also explained this scheme allows smaller cooperatives to start with two or three types of businesses, while larger cooperatives can expand into more sectors.

The meeting, chaired by the Coordinating Minister for Food Affairs as Head of the National Task Force, also concluded that cooperative operations will begin simultaneously in September. Local governments, subdistrict heads, and private sector partners will be directly involved to ensure standardized implementation nationwide.