Purbaya Shifts Rp 34 Trillion in Village Funds to Kopdes Merah Putih: Here's Why
Jakarta, VIVA – Finance Minister Purbaya Yudhi Sadewa has issued Minister of Finance Regulation (PMK) No. 7 of 2026 on the Management of Village Funds for Fiscal Year 2026.
Under the regulation, which took effect from its promulgation on 12 February 2026, Article 15 paragraph (3) stipulates that 58.03 per cent — or Rp 34.57 trillion — of the Village Fund allocation is to be focused on supporting the funding of the Koperasi Desa Merah Putih (KDMP) programme.
“The allocation adjustment is a consequence of government policy to support the implementation of KDMP,” as cited from PMK No. 7 of 2026, Monday, 16 February 2026.
Under this regulation, the total Village Fund ceiling for 2026 of Rp 60.57 trillion leaves only Rp 26 trillion as the regular Village Fund allocation outside of the KDMP programme. The Village Funds allocated to support the KDMP programme are focused on instalment payments for the physical construction of retail outlets, warehousing, and KDMP equipment.
Meanwhile, Article 20 paragraph (1) of PMK No. 7/2026 stipulates that the use of Village Funds is primarily to support sustainable development.
This includes addressing extreme poverty through village direct cash assistance; strengthening climate-resilient and disaster-resilient villages; enhancing promotion and provision of basic health services at village level; and supporting the implementation of KDMP.
It also covers food security or food storage programmes, energy, and other village economic institutions; support for KDMP implementation; as well as the construction and maintenance of village infrastructure through village cash-for-work programmes.
Further provisions address the development of digital infrastructure and technology in villages, and/or other priority sector programmes in villages, including the development of village potential and competitive advantages.
The Village Fund disbursement scheme is separated exclusively. Regular Village Funds are disbursed through deductions from the Village Fund of each regency/municipality, with the resulting funds transferred to the Village Treasury Account (RKD).
Village Funds supporting the implementation of KDMP are disbursed directly from the State General Treasury Account (RKUN) to the fund disbursement holding account.
“The disbursement of Village Funds shall be carried out after the Budget User Authority for the Disbursement of Village Funds, Incentives, Special Autonomy and Special Status receives the complete and correct disbursement requirement documents from the regent/mayor,” as cited from Article 24 paragraph (1).