BUMDes enterprises show divergent growth and operational challenges in Indonesia

Village-owned enterprises (BUMDes) in Indonesia are showing varying levels of success and facing structural challenges. In Kutai Kartanegara, East Kalimantan, BUMDes Payang Sejahtera has recorded a cumulative turnover of Rp115.11 billion between 2019 and 2025. Supported by community empowerment programs from PT Multi Harapan Utama (an MMS Group Indonesia subsidiary), the enterprise manages 14 business units across sectors including catering, transportation, plantations, water supply, fisheries, and construction. This growth has contributed Rp1.68 billion to village original income and provided employment for 195 residents.

Conversely, in Pacitan, BEMDes performance remains sub-optimal. Local authorities report difficulties in mapping and developing diverse local potentials such as agriculture, tourism, and fisheries into productive business units. Challenges in Pacitan include a lack of formal business legality, with only 19 out of hundreds of BUMDes possessing a Business Identification Number (NIB). Additionally, the emergence of the Merah Putih Village Cooperative (KDMP) presents a new competitive landscape for village governments as they attempt to manage these evolving economic institutions.