Government Backs Massive Village Cooperative Initiative with Rp240 Trillion Loan Guarantee

State-Owned Banks to Lead Financing Effort

The Indonesian government has launched an ambitious initiative to boost village cooperatives through a massive Rp240 trillion financing program. State-owned banks (Himbara) have been tasked with providing the substantial loan to PT Agrinas Pangan Nusantara (Persero), a state-owned enterprise responsible for implementing the cooperative development program.

Government Guarantee Structure

Finance Minister Purbaya Yudhi Sadewa revealed that the government will guarantee the loan through the state budget (APBN), with a structured repayment plan. The annual repayment of Rp40 trillion will be made over a period of six years, providing a clear and manageable financial commitment for the government. This guarantee is designed to minimize risk for participating banks, making the loan an attractive and secure investment opportunity.

Minister's Assurance to Banking Sector

During a public appearance in Jakarta, Minister Purbaya emphasized the security of the loan arrangement, stating, "Therefore, the loan is secure. Banks don't face significant risk because the loan is guaranteed." This assurance aims to encourage state-owned banks to participate fully in the program without concern for potential defaults.

Program Significance and Implementation

The massive Rp240 trillion loan program represents a significant commitment to developing Indonesia's rural economy through cooperative development. By leveraging state-owned banking institutions and providing government guarantees, the program creates a robust framework for supporting agricultural and rural development initiatives. The initiative targets 80,000 cooperatives, indicating a comprehensive approach to rural economic development.