The Ministry of Co-operatives and Small and Medium Enterprises has decided to crack the whip on savings and loan co-operatives operating illegal online loan schemes by rescinding their permits.

“Regarding the legality of business entities, we will coordinate with the Ministry of Law and Human Rights to revoke their business licenses, rendering the co-operatives illegal, as the government has dissolved the entities,” the ministry’s Deputy for Co-operatives, Ahmad Zabadi, stated in Jakarta on Wednesday.

The ministry must be proactive in suing illegal online lending companies that misuse the savings and loan co-operatives permit, as their actions can tarnish the image of co-operatives in the public’s eyes, he stated.

Zabadi confirmed that the ministry had communicated with the Indonesian Notary Association to discuss the issue of some public notaries that assisted illegal online lenders to gain legal status by certifying the syndicate’s articles of incorporation as co-operatives.

The authority had received a tip that a public notary had administered nearly 40 articles of incorporation utilized for such purposes from 2020 to 2021, he stated.

“We have delivered our letter to the Indonesian Notary Association regarding the identity of the public notary, and we hope that the organization would take firm measures against the suspected public notary by examining the legality of articles of incorporation of co-operatives-turned-illegal online loan syndicates that they had certified,” Zabadi stated.

He confirmed that the ministry had also engaged with the Ministry of Communications and Informatics to review the electronic system permits granted to some savings and loan co-operatives.

“We suggested to the ministry to adjust the criteria for the operation of the private electronic system for permit application,” the deputy noted.

The deputy suggested that the ministry should necessitate presenting evidence of savings and loan business permits for co-operatives applying for a private electronic system operation permit.

The Co-operatives and Medium and Small Enterprises Minister Regulation No. 09 of 2018 had stipulated savings and loan co-operatives to apply for savings and loan business permits before being allowed to operate, he added.

Zabadi expressed optimism that the additional requirement would allow the ministry to identify savings and loan co-operatives that had applied for savings and loan business permits and to ensure that all cooperatives granted permits are legal.

Source: Antara News