The decline in public interest in joining cooperatives was reflected in the results of an opinion poll conducted by Kompas in early July.
By
ARITA NUGRAHENI
·4 minutes read
The government has to anticipate the decline in public interest in joining cooperatives. Diversifying cooperatives can be an entry point to answer the needs of the community at small and micro levels. Strengthening the spirit of mutual cooperation is the door to reinforcing the prestige of the cooperatives in the eyes of the public.
The decline in public interest in joining cooperatives was reflected in the results of an opinion poll conducted by Kompas in early July. A total of 13.4 respondents in the survey said they were no longer members of a cooperative. As many as 72.2 percent of respondents said that they have never been members of a cooperative.
There are three main reasons why people are not interested in cooperatives. First, there is minimal information about them. A total of 17.4 percent of respondents said they did not know about cooperatives. The Cooperatives and Small and Medium Enterprises (SMEs) Ministry should increase the dissemination of information about cooperatives in the community so that people know about their existence.
Second, cooperatives are difficult to access; 27.4 percent of respondents said there were no cooperatives in their residential areas, schools or workplaces. This is an opportunity for cooperatives to be present in the community as an alternative solution for meeting the financial needs of the community.
There was also a fear that the funds would be misused by the cooperative’s management board.
Third, there is no strong appeal, compared to other financial services, that can entice people to join cooperatives. Of the respondents who had never been or were no longer members of a cooperative, 48.4 percent said cooperatives were less attractive, no longer relevant to their needs and less profitable. There was also a fear that the funds would be misused by the cooperative’s management board.
The decline in interest in cooperatives is also apparent in Statistics Indonesia (BPS) data, which shows a 17 percent decline in the number of active cooperatives in 2018. The number declined by a further 2.6 percent in 2019 to 123,000 active cooperatives.
In 2017, the country’s cooperatives had 18.3 million members, down 52.8 percent from the previous year. Although the figure is slowly rising again, cooperatives still need to improve.
Data from December 2020 shows 127,000 active cooperatives in the country, almost half of which are located on Java. The ratio of the availability of cooperatives to the number of residents in each province should be increased so that the presence of cooperatives can help empower micro- and small-scale economies on Java and beyond.
Protection and financial literacy
Referring to the three reasons why people have not chosen cooperatives, the issue of the potential misuse of funds should receive special attention. At least this was stated by 10.7 percent of the respondents in the survey.
The good image of cooperatives as agents of community empowerment should not be tarnished by the misuse of funds. Moreover, 38.4 percent of the respondents said that they were aware of information about fraudulent investments under the guise of cooperatives and some had even been deceived.
According to Kompas\' records over the past two years, several cooperatives have been reported to have failed to meet their financial obligations, such as BMT Amanah Ray in Medan, KSP Indosurya Cipta, seven cooperatives owned by I Gusti Agung Jaya Wiratma in Bali and the Sahabat Syariah Cooperative, as well as Muslims 212 in Samarinda.
Additional challenges
Low financial literacy also remains a challenge. Only 28.8 percent of respondents, for example, checked the legality of cooperatives.
Cooperatives are actually expected to become the pillars of the nation\'s economy. A number of efforts need to be strengthened so that the cooperatives can benefit the community, especially in the small and micro business sector.
It is necessary to study the diversification of cooperative types, which are now still dominated by savings and loan cooperatives. Moreover, cooperatives are still considered by the majority of the respondents – 70.4 percent – mere savings and loan platforms.
In the end, maintaining the prestige of cooperatives by strengthening the principle of kinship and the spirit of mutual cooperation can allow this institution to shine again. Now is the time to entice people to return again to cooperatives and grow together through them. ( R&D KOMPAS
(This article was translated byHendarsyah Tarmizi).