Jakarta — The Indonesian government is advancing its rural economic transformation agenda by establishing Koperasi Desa Merah Putih (Village Cooperatives), or Kopdes, aimed at cutting out middlemen and loan sharks that have long burdened rural communities.

Coordinating Minister for Economic Affairs and Food, Zulkifli Hasan (popularly known as Zulhas), announced the initiative following a meeting with President Prabowo Subianto at the Presidential Palace on Thursday, May 8.

Zulhas explained that the formation of Kopdes is part of Presidential Decree (Keppres) No. 9 of 2025, which mandates the acceleration of the Village Cooperatives initiative. As of May 8, 9,835 Kopdes units have been established, with more expected to follow in the coming months.

“These cooperatives are designed to shorten the long supply chains. Kopdes will source essential goods directly from producers and deliver them straight to villages,” said Zulhas.

Each Kopdes will also serve as a distribution hub for government aid—such as fertilizers, LPG canisters, and basic food supplies—and act as a microfinance extension arm through partnerships with state-owned banks BRI and BNI. With supervised savings and loan activities, the government hopes Kopdes can curb the proliferation of illegal lending and online loan sharks (pinjol) that have become predatory in rural areas.

“Not only will Kopdes eliminate supply chain inefficiencies, but they will also replace loan sharks and illegal lenders, especially with BNI onboard. Goods like fertilizer can now be sent directly from the government to the people, bypassing middlemen entirely,” he emphasized.

Indonesia currently has over 130,000 cooperatives, but many are dormant or underperforming. Under this new scheme, existing cooperatives can either be converted into Kopdes or replaced with newly established ones, depending on the outcome of local village forums known as Musyawarah Desa Khusus (Musdesus). To support this effort, the government has created a Kopdes Task Force, chaired by Zulhas, to accelerate nationwide implementation.

The program is slated for full-scale rollout and official launch on October 28, 2025, coinciding with Youth Pledge Day, a historic national commemoration. Each Kopdes unit will receive an initial credit ceiling of up to IDR 3 billion—not in the form of grants, but as revolving loans to be managed professionally and sustainably.

“This is not free aid; it’s a credit facility. Each cooperative will be mentored and guided. That’s the role of the task force—to assign them work, build their businesses, and oversee operations. Repayments will be made from profits generated by these activities, facilitated by Himbara (Association of State-Owned Banks),” Zulhas concluded.