Prabowo Irked by Trillion-Rupiah Unpaid Debts, Pushes Village Cooperatives
President Prabowo Subianto has voiced his irritation that many Indonesian entrepreneurs are not paying their debt obligations. At the start of his administration, he implemented a policy of debt cancellation for those genuinely unable to pay. “The debt is in the trillions, and they don’t want to pay. After this, we will use restructuring, that’s the fancy term. The people cannot do that,” he revealed during the peak commemoration of the 79th National Cooperative Day in Jakarta, Sunday (12/7/2026).
He noted that not only entrepreneurs but also farmers are often trapped in debt, resorting to loan sharks for their daily needs. “I thought there was no other way. Our people must have the opportunity to borrow money with low interest,” he said. Prabowo stated that this situation was the background for the birth of cooperatives, which are expected to save the public from the trap of loan sharks. He imagined that with authority, running cooperatives could be easier. “The answer is that there must be a savings and loan cooperative in every village in Indonesia. That is why the figure of 81,000 emerged, because that is the number of our villages and sub-districts,” Prabowo explained.
On this occasion, he also confirmed that the Koperasi Desa/Kelurahan Merah Putih (KDKMP) will become a savings and loan outlet with attractive interest rates. KDKMP will even offer cheap credit, including micro and ultra-micro loans like MEKAAR. Prabowo promised that the MEKAAR credit interest rate, which was originally up to 22 percent, will be reduced to 8 percent. He admitted that he actually wanted the MEKAAR credit interest rate to drop to 5 percent. “I want 5 percent, but the bankers, Rosan and the Danantara team, said ‘Sir, don’t make it too thin, we have costs.’ But compared to 22 percent, 8 percent is pretty good. Right!” he explained. He also emphasised that KDKMP will become an integrated service centre featuring a pharmacy selling affordable generic medicines, cold storage facilities to help farmers and fishermen store their harvests and catches, and will also sell subsidised goods such as 3 kg LPG canisters and cooking oil.