Sharia Cooperatives Continue to Serve SMEs Micro Finance

Jakarta, InfoPublik - World Bank survey mentioned the 106, 829 cooperatives in Indonesia, 3,360 of which are Credit Unions (KSP) and syaria Savings and Loans Unit (USP), have provided financial services to micro and small enterprises (MSEs) as well as the community.

Indonesia Cooperatives and SMEs Ministry Deputy Finance Braman Setyo said the cooperative financing process is easy and fast, also located near local residence or business. "There are also communites who know each other inside those cooperatives," he said in a press release on Thursday (4/28).

Cooperatives and SMEs ministry continues its efforts to strengthen the existence of sharia cooperative in Indonesia to realize the target of the National Medium Term Development Plan (RPJMN) 2014-2019. Among which is economic, financial and sharia cooperatives literacy as well as development of sharia credit union in regions and communities accross Indonesia.

Brama explained, the ministry is also conducting efforts to empower and develop sharia cooperatives in terms of both size and quality, including the cooperatives’ social and business areas. In addition, the ministry also encourages the increase of the collection of zakat (Islamic mandatory alms), infaq (voluntarily alms), sodaqoh (donations), and wakaf (endowments) for the empowerment of SMEs.

Moreover, an improvement of access to sharia finance is conducted through advocacy and cooperation among sharia financial institutions, in addition to improvement of sharia adherence and good cooperative governance implementation. The ministry also conducts effort to increase the effectiveness of supervision despite the inclusive financial policies and programs that affect the scope of work of sharia KSP/USP.

Cooperatives and SMEs ministry continues to coordinate with relevant parties to rach the involvement of non-bank financial institutions including sharia KSP/USP. "In principle and according to regulation, it is possible, though we still need to find more appropriate technical schematics and procedure. Aspects of economic access justice and equality among actors shall be calculated more detail," said Braman. (Translator: Penni Patmawati Rusman)