Social Affairs Minister Explains Scheme for Distributing Social Assistance via Village Cooperatives
Minister of Social Affairs Saifullah Yusuf said the government is preparing a scheme to distribute social assistance (bansos) through the Red and White Village/Urban Ward Cooperatives (KDMP). According to him, the mechanism is still at the simulation stage and under regulatory discussion with the relevant ministries.
“But the essence is that social aid can later be distributed through the Red and White Village Cooperative or Red and White Urban Ward Cooperative,” said Gus Ipul, as Saifullah Yusuf is familiarly known, at the Ministry of Social Affairs office in Jakarta on Friday, 24 July 2026.
He explained that two schemes are being studied specifically for the disbursement of cash assistance such as the Family Hope Programme (PKH). Under the first scheme, distribution would still go through the banks of the Association of State-Owned Banks (Himbara), but disbursement services would be opened at Red and White village cooperative outlets.
Under the second scheme, the government would open the option of channelling social aid funds directly into cooperative accounts, to be subsequently withdrawn by beneficiaries at the cooperative. “We are running simulations, testing the regulations,” he said.
Gus Ipul said the change of scheme requires regulatory adjustment. The Ministry of Social Affairs is still discussing the form of regulation considered the fastest, most effective, and capable of accelerating the delivery of assistance to the public.
The distribution scheme will later be trialled first at a number of cooperatives that are ready. In the initial phase, the government will likely still use Himbara as the distributor, but with service counters opened at cooperatives.
In addition, Gus Ipul added, cooperative administrators will not be given the authority to verify social aid recipients. The determination of recipients, he said, will take place automatically through a digital system. Once the digitalisation of social aid is fully implemented, verification can be carried out using facial recognition of beneficiaries.
“So it will be automatic, especially once the digitalisation of social aid is fully complete. All beneficiaries will have their facial records on file, making it even easier,” he said.
The distribution of social aid through cooperatives is claimed to be more effective because it makes it easier for people to collect their assistance. As cooperatives are located in every village, collection points will be closer to beneficiaries’ homes.
“If it goes through the cooperative, it will certainly be much closer to the beneficiary’s home, so they will not need to leave their village,” he said. In addition, recipients can also directly buy basic necessities at the cooperative after withdrawing their assistance.
Gus Ipul believes the new scheme is sufficiently safe from the potential for aid deductions. “There will be no deductions; it is not allowed, and it is not possible to cut the aid,” he said.
The plan to make the Red and White cooperatives the distributor of social aid was disclosed by Coordinating Minister for Food Zulkifli Hasan after a cabinet meeting led by President Prabowo Subianto at the Presidential Palace in Central Jakarta on Wednesday, 15 July 2026. Zulkifli said the Red and White cooperatives would become government infrastructure for distributing various forms of assistance, including social aid.
“Social aid and subsidised goods must go through the village cooperatives later so that it is clear, because every village has one,” he said.
Government assistance to be distributed through the Red and White cooperatives includes the 10-kilogram rice assistance, the Family Hope Programme (PKH), and non-cash food assistance (BPNT).