Regulation of the Ministry of Home Affairs on DAU and DBH for Merah Putih Cooperative Loans

The government will soon issue Regulation of the Ministry of Home Affairs (Permendagri) governing the use of General Allocation Funds (Dana Alokasi Umum - “DAU”) and Revenue Sharing Funds (Dana Bagi Hasil - “DBH”) for Merah Putih Village Cooperatives (Koperasi Desa Merah Putih - “KDMP”). This policy will complement the amendment to the Regulation of the Minister of Finance (Permenkeu) No. 108 of 2024 This policy will complement the amendment to the Regulation of the Minister of Finance (“Regulation 108/2024”).

“The harmonization process has been completed; we are just waiting for the date of its promulgation,” said Director of Regulation Harmonization I Hernadi to Hukumonline.

The Permendagri will regulate the loan approval mechanism, particularly from the regent/mayor to the KDMP/Merah Putih Sub-district Cooperative (Koperasi Kelurahan Merah Putih - “KKMP”). Where KDMP/KKMP can obtain loans from government-owned banks of up to Rp. 3 billion with an interest rate of 6 percent per year and a maximum loan tenor of 6 years.

“The policy changes in the Permenkeu also include adjustments to the disbursement requirements for the Phase II of the Village Fund, especially for villages that have not yet received the first phase disbursement,” he added.