Induk KUD Develops People’s Credit Bank (BPR)

Induk KUD, Jakarta – In the 1970s, we knew Bukopin (Indonesian Cooperative Bank) as a Cooperative Bank with a cooperative legal entity. Induk KUD was one of the founders of Bukopin, and in the initial stages of its establishment, Induk KUD covered the costs of office rent, water, electricity, and telephone. To strengthen Bukopin’s capital, Induk KUD transferred funds from other banks to Bukopin, and the development funds, risk funds, and special savings of KUD were converted into equity of Bukopin. In order to improve Bukopin’s liquidity and assets, Induk KUD converted the Cooperative House on Jalan S. Parman-Slipi from Induk KUD’s assets into Bukopin’s assets, which were later converted into shares owned by Induk KUD and Pusat KUD (Regional Cooperatives Center) in Bukopin.

During its early operations, Bukopin focused on the MSME segment, particularly paying attention to and serving the cooperative movement in Indonesia. Bukopin later merged with several other cooperative banks. In 1989, Bukopin changed its name to Bank Bukopin, transformed its legal status from a cooperative to a Limited Liability Company in 1993, and obtained a Devisa Bank status in 1997.

The hope of Induk KUD to have a Cooperative Bank again or a Bank focusing on the MSME segment, with a special emphasis on serving cooperatives, never faded. Induk KUD has been continuously urging the Indonesian government to sell all shares in Bank Bukopin to the cooperative movement. Currently, Induk KUD, together with its business partners, is known to be developing People’s Credit Bank (BPR).

According to the Chairman of Induk KUD, Herman Wutun, the development of Microfinance Institutions (MFIs or microfinance) is currently crucial, especially for the community, particularly cooperative members, small and micro-businesses, and low-income individuals who may not have access to formal financial institutions. “Thus, the development of a formal Microfinance Institution, namely People’s Credit Bank (BPR), is highly important for Induk KUD and its network,” he said. “The goal is to facilitate Induk KUD’s network in accessing working capital for its members and ultimately becoming a Cooperative Bank operating throughout Indonesia,” added Herman Wutun.

Furthermore, Herman Wutun stated that PT. BPR Swadaya Tunggal has had all its shares acquired by Induk KUD’s business partner, PT. Techking Enterprise. Together, they will operate BPR under the new name PT. BPR Koperindo Jaya. “PT. BPR Koperindo Jaya will focus on serving MSMEs, especially cooperatives, and will also expand its business network with the general public,” he said. “In the future, members of Induk KUD’s network will have the opportunity to participate in PT. BPR Koperindo Jaya’s shareholding,” concluded Herman Wutun.

On another occasion, the CEO of Induk KUD, Portasius Nggedi, stated that the finalization of the cooperation with PT. Techking Enterprise is being intensively carried out. “Initially, we are targeting DKI Jakarta and its surrounding areas, involving Pusat Koperasi Pasar (Koppas) DKI Jakarta and 25 (twenty-five) Primary Koppas in DKI Jakarta,” he added. “Additionally, to expand services to cooperatives, especially Induk KUD’s network, we have explored cooperation with members, such as Pusat KUD Sumatera Utara, Pusat KUD Jawa Barat, Pusat KUD Jambi, and Pusat KUD Bali,” concluded Portasius Nggedi.

The operation of PT. BPR Koperindo Jaya will undoubtedly facilitate MSMEs, especially cooperative members, in accessing funding. However, the future challenges ahead are becoming more difficult. The ability of PT. BPR Koperindo Jaya to compete must be enhanced because the business environment of Financial Intermediary Institutions is changing. A few years ago, the speed and flexibility were the strengths of BPR that no one could match. Even if there were loan sharks or informal lenders that moved faster, BPR could easily conquer them. However, in the past three years, a new species called Financial Technology (Fintech) emerged with the ability to outpace BPR. Additionally, the expansion of People’s Business Credit (Kredit Usaha Rakyat – KUR), which has a government-subsidized interest rate of only 7% in 2019, has significantly impacted the credit market of BPR, where the average interest rate is 24%. (TAB).