Government Harmonizes New Regulations on Merah Putih Cooperative Financing

The government is harmonizing the draft Regulation of the Minister of Finance which discusses the procedures for distributing General Allocation Funds (“DAU”), Revenue Sharing Funds (“DBH”), and village funds to support the acceleration of physical development of outlets, warehouses, and facilities for Merah Putih Village/Sub-District Cooperatives (“KDKMP”). This policy will replace Regulation No. 49 of 2025 on Procedures for Loans in the Context of Financing Merah Putih Village/Sub-District Cooperatives (“Regulation 49/2025”).

“In the future, the placement of funds in banks as a source of liquidity for KDKMP financing will be conducted in stages, taking into account the state's financial liquidity conditions,” said an internal source at Hukumonline at the Directorate-General of Fiscal Balance (DJPK) of the Ministry of Finance.

In order to support the liquidity of the Merah Putih Cooperative program, the government will also use the Budget Surplus funds available at Bank Indonesia, channeled through banking loan facilities. The financing scheme has a maximum application limit of Rp 3 billion per Merah Putih Sub-District Cooperative (“KKMP”) or Merah Putih Village Cooperative (“KDMP”) unit, with an interest rate/margin/profit sharing of 6% per year, with monthly installment payments through DAU/DBH or in a lump sum.