Regulations
Experts argued that SOE banks still need to assess the commercial viability of the cooperatives and not just rely on the government backstop.
Affordable care: A seller serves a customer on July 21 at a pharmacy during the launch ceremony for a cooperative under the government's Red and White Cooperatives program, in Serang regency, Banten, West Java. (Antara/Angga Budhiyanto)
Concerns mount as Red and White Cooperatives’ (KDMP) loan repayments near, with experts warning that the massive financing behind President Prabowo Subianto’s priority program could put additional pressure on state-owned banks and the country’s fiscal capacity. The government initially aims to build 80,000 cooperatives across the archipelago backed by syndication financing from state-owned lenders totaling around Rp 220 trillion (US$12.3 billion) channeled to PT Agrinas Pangan Nusantara, the state vehicle responsible for constructing the physical infrastructure for the cooperatives program.
The target was eventually reduced to only 40,000 cooperatives, with 30,000 units targeted to be operational by the end of this year.
