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New law to protect customers from unscrupulous cooperatives
Initially set for 2016, the bill was previously listed as one of the 55 national legislation programs between 2014 and 2019. Three years later, however, the government has yet to ratify the bill.
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President Joko "Jokowi" Widodo delivers his speech at the commemoration of the National Cooperatives Day in Jambi in this file photo. (Antara Foto/Wahdi Septiawan)
A new law is to provide clear guidelines and regulations to improve the service of the country's 130,000 cooperatives.
The bill, which is now being revised, will soon be taken to the House of Representatives for deliberation.
The Cooperatives, Small and Medium Enterprises Ministry’s undersecretary overseeing institutions, Luhur Pradjarto, said the bill would also explain the details about sanctions for those engaging in unfair practices.
Koperasi simpan-pinjam (savings and lending cooperatives) have traditionally controlled finance for people on low incomes for decades in Indonesia, making the bill essential to regulate their activities, Luhur said.
“We have a big cooperatives community, at least 130,000 of them. If they aren’t organized, we will have businesspeople who will put our people at a disadvantage,” said Luhur on the sidelines of a press conference.
Such loan sharks usually charge high interest rates as well as offer fast and easy loans to attract new customers, who will then have their money swindled by cooperatives, Luhur explained. The act violates the cooperatives' main principle that prohibits them from obtaining funds from nonmembers.
