Finance Minister Purbaya Yudhi Sadewa has signed a letter guaranteeing loans from state-owned banks (Himbara) to the Red-and-White Village and Urban Cooperatives (KDKMP), backed by village funds aimed at resolving the months-long issue surrounding the disbursement of credit for the government-backed cooperative program.

“With this letter from the Finance Ministry, confirming that the KDKMP loans are guaranteed by village funds, Himbara banks can start disbursing credit as early as Friday (October 24),” Purbaya told reporters after a meeting in Jakarta on Thursday evening, October 23, 2025.

The decision followed a coordination meeting earlier in the day involving Minister of Cooperatives Ferry Juliantono and Danantara Investment Management Agency Chief Operating Officer Dony Oskaria.

Available funding

Purbaya said the financing will come from Rp200 trillion in government deposits placed in banks and Rp16 trillion from the 2025 State Budget’s remaining surplus (SAL), totaling Rp216 trillion (US$13.6 billion).

“We’ve allocated Rp200 trillion in placement funds plus Rp16 trillion from the state budget surplus. The government will charge a 2 percent rate, and KDKMP can follow the existing loan procedures,” he said.

The government’s assurance is expected to accelerate funding for cooperatives that are building retail outlets, warehouses, and other physical infrastructure in villages and urban neighborhoods.

According to Minister Ferry Juliantono, Thursday’s meeting lasted only 30 minutes but was crucial in aligning understanding among stakeholders to expedite the loan disbursement.

“The meeting with Minister Purbaya and Pak Dony was short but important to synchronize our process with Himbara banks. The goal is to ensure faster credit realization since construction of outlets and warehouses has already started,” Ferry said.

He added that the loan ceiling remains Rp3 billion per cooperative unit, with funds divided between physical infrastructure and working capital.

“There are no obstacles. The discussion was precisely to make the credit flow smoother. We’re also finalizing land inventory in villages where outlets and warehouses will be built,” he added.

Ferry revealed that President Prabowo Subianto is expected to issue a new presidential instruction (Inpres) to accelerate the construction of KDKMP outlets and logistics facilities. The government targets all cooperatives to be fully operational by March 2026.

“According to the State Secretary, the President will soon issue an Inpres on accelerating the construction of KDKMP physical infrastructure, warehouses, and support facilities,” he said.