Can the Merah Putih Cooperative Become a Hope for Micro-Ultra Micro Enterprises?

The business world in Indonesia is classified into five types: large enterprises, medium enterprises, small enterprises, micro enterprises, and ultra-micro enterprises. Micro and ultra-micro enterprises account for 98.68 percent of the total number of entrepreneurs in the country. Generally, they have not been reached by the banking world because they are not yet bankable. As a result, when they see business opportunities, they cannot seize and utilise them well due to a lack of capital. To address this issue, they often borrow from moneylenders or through illegal online loans (pinjol). Clearly, all of these come with very high interest rates. I was once visited by a community figure who was quite elderly, over 75 years old. He came to see me from a district that was quite far from where I was. To me, he recounted how sad the fate of micro and ultra-micro entrepreneurs was in his area of residence. To start and continue their businesses, they had no capital. They were forced to borrow from “BANG 46.” Initially, I thought it was Bank BNI 46, now better known as BNI. It turned out that it was a term already famous among them. It means, “Borrow 4, repay 6 within 10 weeks.” The interest charged to them by the moneylenders was 50 percent per 10 weeks. In a year, there are about 50 to 52 weeks. That means, the interest they have to pay for one year is 250 percent!