Indonesia to use Village Fund to repay Kopdes Merah Putih debt

Finance Minister Purbaya Yudhi Sadewa has confirmed that the government will use the Village Fund (Dana Desa) to settle the debt obligations of the Kopdes Merah Putih cooperative, which are due in September 2026.

The Village Fund, which has a total budget of Rp240 trillion intended for the development of approximately 80,000 cooperatives, will be used to pay installments and interest at a rate of approximately Rp40 trillion per year. The government is currently awaiting audit and verification processes for the first phase of the Kopdes Merah Putih program.

Payments will prioritize completed and audited projects. For ongoing projects, the government will evaluate progress and may provide payments under specific conditions and commitments. State-owned banks under the Himpunan Bank Milik Negara (Himbara) will be involved in the commitment signing process.