Indonesia ready to develop sharia economy through cooperatives

Indonesia’s Ministry of Cooperatives noted in its empirical data that sharia cooperatives supported by sharia financing cooperatives are effective in combating loan shark practices and high-margin loans.

 

Jakarta (Indonesia Window) – Indonesia’s Ministry of Cooperatives stated that it will continue to provide support for efforts to develop sharia economy through cooperatives.

One of the supports is by providing financing assistance with a sharia scheme distributed through the Revolving Fund Management Institution (locally known as Lembaga Pengelola Dana Bergulir (LPDB) to Al Bahjah Islamic Boarding School’s Baitul Maal wa Tamwil (BMT/microfinance institutions based on Islamic sharia principles) in Cirebon district, West Java province.

Deputy Minister of Cooperatives Ferry Juliantono appreciated the role of the Al Bahjah Islamic Boarding School in developing sharia economy through the BMT Al Bahjah Cooperatives, the Ministry of Cooperatives said on its website on Monday (March 24).

As a partner of LPDB, Al Bahjah BMT is considered consistent in building a sharia-based economy accompanied by preaching that is full of spiritual values.

“We from the Ministry of Cooperatives are deliberately present to provide support to the Al Bahjah Islamic Boarding School and of course we honor Buya Yahya,” Ferry Juliantono said during a working visit to Al Bahjah BMT, Saturday (March 22).

Empirical data from the Ministry of Cooperatives notes that sharia cooperatives supported by sharia financing cooperatives are effective in combating loan shark practices and high-margin loans.

Sharia cooperatives have also proven to be able to provide better financial access to micro and ultra-micro communities.

“This value then gives the spirit to BMT or Sharia Financing Cooperatives to have much greater energy power compared to conventional ones to be able to fight loan sharks, fight loans with very high margins,” he noted.

On that occasion, Ferry Juliantono also conveyed the government’s plan to form the Merah Putih village cooperatives in the districts of Cirebon, Indramayu, and Kuningan in West Java province. Merah Putih refers to the Indonesian national colors.

Ferry hopes that Al Bahjah BTM would assist other cooperatives in managing sharia financing.

“Earlier I conveyed to Buya Yahya who is the guardian of the Al Bahjah Islamic Boarding School/LPD to help us guide the cooperatives that would be established in accordance with the government direction,” Ferry explained.

Ferry hopes that the Al Bahjah Islamic Boarding School’s alumni who have spread throughout Indonesia can also contribute to the development of the village cooperatives.

The target for developing the village cooperatives is to develop comprehensive operational activities, including retail management, pharmacies, village clinics, transportation, and warehousing.

Regarding the target for the formation of village cooperatives nationally, Ferry Juliantono said that according to Indonesian President Prabowo Subianto’s direction, it is hoped that by July they would have been formed in almost 70 thousand villages across Indonesia.

The Ministry of Cooperatives will use three approaches in developing village cooperatives, namely revitalizing existing and good cooperatives, revitalizing cooperatives that are not yet advanced, and establishing new cooperatives in villages that do not yet have cooperatives.

“By this visit, it is hoped that it can be an important momentum in strengthening the synergy between the government, Islamic boarding schools, and the people in an effort to realize sustainable and inclusive economic empowerment in Indonesia,” he said.

Meanwhile, Buya Yahya is ready to give support to the government in making the formation of the Merah Putih village cooperatives a success, especially sharia cooperatives.

According to Buya Yahya, in addition to promoting the spirit of goodness, sharia cooperatives are part of the economic development of the people.

“We call on anyone to have more spirit of sharia. We want to attract as many people as possible to join here (cooperatives),” he said.

Reporting by Indonesia Window