Cooperatives in Bali get Rp 7.5 billion in funding

Cooperatives in Bali received Wednesday a financial boost with the signing of a memorandum of understanding (MOU) between the provincial administration-owned Regional Development Bank (BPD) and the Agency for Revolving Fund Management for Cooperatives and Small and Medium Enterprises (LPDB-KUKM).

The agency was established in 2007 to act as a kind of central bank for cooperatives lending money to their members.

The MOU centers on the disbursement of a Rp 7.5 billion fund through BPD Bali, which is part of a total of Rp 381 billion to be disbursed through 21 BPDs nationwide.

Agency president director Chairul Fadjar Sofyan said the revolving fund would be distributed to the public with a low interest rate of 4 percent.

"We will add the allocation if the Rp 7.5 billion is not enough for Bali," he said.

The MOU was signed on the sidelines of a provincial cooperative coordinating meeting held at the Sanur Paradise Plaza Hotel.

During the meeting, it was revealed that lack of commitment and understanding on the part of cooperative managers had caused 30 percent of cooperatives in the country to stagnate, although the condition in Bali remains much better.

Guritno Kusumo, secretary of the State Ministry for Small and Medium Enterprises and Cooperatives, said that of some 140,000 cooperatives in Indonesia, 42,000 remained inactive.

"Both managers and members lack understanding of cooperative principles, resulting in the cooperatives being inactive," he told participants at the meeting.

The national condition is in stark contrast to Bali, which is in much better shape with only 256 inactive cooperatives out of 3,504 cooperatives registered in the province.

"Cooperatives in Bali show promising performance," Guritno said.

Records show the number of cooperatives is increasing by 14.85 percent per year compared to national growth of only 5.99 percent. In Bali, cooperatives are on the rise by 4.47 percent per year, and now feature about 700,000 members.

Nyoman Sugawa Korry, chairman of the Bali branch of the Indonesian Cooperatives Council (Dekopin), said the inactive cooperatives were the result of managers who were unable to face tight competition.

"We will reactivate those cooperatives that are in a coma, pushing them toward self-reliance," he said.

Ni Komang Erviani , THE JAKARTA POST , DENPASAR | Thu, 02/26/2009 1:59 PM | Bali