Finance Minister Purbaya Issues New Regulation, Allowing DAU and Village Funds to Finance Merah Putih Village Cooperatives

JAKARTA - Finance Minister Purbaya Yudhi Sadewa has issued a new regulation regarding the financing of Merah Putih Village/Urban Village Cooperatives. This regulation opens up the use of regional transfer funds to support cooperative development.

The policy is outlined in Minister of Finance Regulation (PMK) Number 15 of 2026. This regulation governs the procedures for channelling General Allocation Funds (DAU), Revenue Sharing Funds (DBH), and Village Funds for the physical development of outlets, warehouses, and cooperative equipment.

“In order to support bank financing for the acceleration of physical development of outlets, warehousing, and equipment for KKMP/KDMP, the Minister places funds as a source of bank liquidity financing in stages, taking into account the state financial liquidity conditions,” states Article 2 paragraph (1) of PMK 15 of 2026, quoted on Monday (6/4/2026).

The government has prepared a financing scheme through banking. Banks disburse credit for cooperative development with a maximum ceiling of Rp 3 billion per unit.

The credit scheme includes interest of around 6 percent per year. The loan tenor is up to 72 months. The grace period for repayment ranges from 6 to 12 months.

The source of loan repayment comes from regional transfer funds. For DAU and DBH, repayment is made through direct deductions from the funds received by local governments.

For Village Funds, repayment is made in a lump sum within one fiscal year.

This scheme requires local governments and villages to share in the financing obligations. The assets built remain the property of the local government or village.

Banks are required to submit applications for fund disbursement. Documents must be completed with handover of work that has been reviewed by supervisory authorities, including the Financial and Development Supervisory Agency (BPKP).

The Ministry of Finance processes recommendations up to fund disbursement. The mechanism includes deductions from DAU and DBH or channelling of Village Funds to a holding account.

The entire process is conducted through an electronic-based information system to ensure transparency and accountability.