Indonesia settles BLBI debt and prepares cooperative payments

The Indonesian government has reached significant milestones regarding national debt and cooperative financial security. Finance Minister Suahasil Nazara confirmed that the government is prepared to pay the first installment of Rp37 trillion for the development of the Merah Putih Village/Sub-district Cooperatives (KDMP). This payment, due in September 2026, is already allocated within the 2026 state budget (APBN). The total financing for the KDMP project is estimated at Rp240 trillion, intended to provide initial operational capital for approximately 80,000 cooperatives nationwide.

Additionally, the government has officially settled the remaining Rp218.3 trillion in Bank Indonesia Liquidity Assistance (BLBI) bond obligations. This marks the conclusion of a nearly 30-year debt cycle stemming from the 1997-1998 economic crisis. While the government's obligation to Bank Indonesia is complete, the state continues to pursue collections from BLBI obligors and debtors.

To further support the cooperative sector, Coordinating Minister for Economic Affairs Airlangga Hartarto proposed amending laws to allow the Indonesia Deposit Insurance Corporation (LPS) to guarantee savings held in cooperatives, similar to bank deposits. This initiative aims to provide legal certainty and security for citizens participating in the government's priority KDMP program.