Government withdraws permission from cooperatives to operate illegal online loans

Jakarta (ANTARA) – The Ministry of Cooperatives and Small and Medium-Sized Enterprises has decided to whip the whip by revoking their permits for savings and loan unions that operate illegal online lending programs.

“Regarding the legality of business units, we will coordinate with the Ministry of Law and Human Rights to revoke their business licenses, which will make the co-operatives illegal as the government disbanded the units,” said the ministry’s deputy co-operative commissioner Ahmad Zabadi said on Wednesday in Jakarta.

The ministry must proactively sue illegal online lending companies that abuse savings and credit unions permission because their actions can damage the cooperatives’ public image, he said.

Zabadi confirmed that the ministry had communicated with the Indonesian Notaries Association to discuss the issue of some public notaries helping illegal online lenders gain legal status by certifying the syndicate’s statutes as cooperatives.

The agency received a notice that a notary public had managed nearly 40 articles of association used for such purposes between 2020 and 2021, he said.

“We have submitted our letter to the Indonesian Notaries Association regarding the identity of the public notary and we hope the organization will take decisive action against the alleged public notary by reviewing the legality of the articles of association of cooperatives that have become illegal online credit syndicate, that they had certified, “explained Zabadi.

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He confirmed that the ministry had also worked with the Ministry of Communications and Informatics to review the electronic system permits that had been given to some savings and credit unions.

“We have proposed to the ministry to adjust the criteria for operating the private electronic system for obtaining permits,” noted the MP.

The MP suggested that the Ministry of Cooperatives applying for a license to operate a private electronic system should provide proof of authorization to operate a savings and loan business.

Minister of Cooperatives and Small and Medium-Sized Enterprises Ordinance No. 09 of 2018 required savings and credit unions to apply for a savings and lending license prior to operating, he added.

Zabadi was optimistic that the additional requirement would allow the ministry to identify savings and credit unions that have applied for a savings and credit business permit and ensure that any licensed cooperatives are legal.

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