Minister of Cooperatives and Small and Medium Enterprises of the Republic of Indonesia (Menkop UKM RI) Drs. Teten Masduki was a resource person at a public lecture entitled “The Role of Government Regulation in Encouraging the Progress of Cooperatives in Indonesia” at the Dean’s Building of the Faculty of Economics and Business (FEB) Universitas Indonesia (UI). Teten said that the role of cooperatives as pillars of the people’s economy requires government policies to advance cooperatives in Indonesia. This policy is related to strengthening fundamentals, so that the vision and mission of cooperatives can grow healthily, with high quality and competitiveness, where they play an important role in national economic development.
He further said that one of the government’s supports for strengthening the role of cooperatives is the Revision of the Cooperative Law (UU) Article 6 Number 25 Year 1992. This revision has implications for the regulation of cooperatives in the financial services sector. Regulations including the purification of cooperative savings and loan businesses according to cooperative identity (cooperative values and principles) are within the realm of regulation and supervision of the Indonesian Ministry of Cooperatives and SMEs and are subject to the Cooperative Law. “Through the revision of the law, it is hoped that in the future, cooperatives will be more effective and have a lot of supporting capacity to develop further. It is due to the fact that since there are a large number of active cooperatives, it cannot be denied that some of them are involved in legal cases,” said Teten.
He further said that cooperatives are very relevant in countries whose business involves multi-stakeholder, multicultural groups, or small-scale producers, such as farmers who play an important role in the economy. Cooperatives provide economic empowerment and integration for these groups to build prosperity, such as providing facilities and providing education in order to increase food security within the country and foster competitiveness in the international realm.
Teten also explained the potential development of Micro, Small, and Medium Enterprises (MSMEs) in Indonesia which cannot be separated from banking support in distributing credit to MSMEs. Based on Bank Indonesia records, 69% of MSMEs still have difficulty getting financial aid from banks, so they tend to use personal financing. “If the model is not changed, it will definitely be difficult for our MSMEs to access banking. Bank credit in Indonesia only reaches 20%, while other countries, such as Malaysia and Thailand, reach above 40%. While South Korea reaches the highest, which is 80%,” said Teten in front of new UI students at an event held on Friday ( 9/29).
Apart from that, Teten also shared his proposal to the President regarding the use of credit scoring so that Micro, Small, and Medium Enterprises (MSMEs) can record their finances digitally and see their track record or cash flow which is connected directly to the digital application. This is a follow-up to President Joko Widodo’s direction requesting that there be alternatives for MSMEs to access financing,” said Teten.
The Dean of FEB UI, Teguh Dartanto, Ph.D., in his speech said that basically, FEB UI wants to work together collectively to maintain the dignity of cooperatives as a pillar of the national economy amidst the challenges and disruption of rapidly developing technology. He added that currently, FEB UI and the National Research and Innovation Agency (BRIN) are collaborating to carry out research and collaboration to encourage the progress of cooperatives in Indonesia. “We hope that the research from FEB UI lecturers can provide recommendations to the government regarding effective cooperative development efforts in Indonesia and provide color to future cooperative policies,” said Teguh.
