In the world of economics, there are several financial institutions. There are several financial institutions that are classified as cooperatives based on their environment, namely school cooperatives, village units, and functional cooperatives.
Cooperatives themselves are financial institutions that are quite well known by the people in Indonesia. In addition to banks, cooperatives are also financial institutions that are used for savings and loans.
The types of cooperatives based on their environment are cooperatives that are quite close to their location or environment with the community.
There are various advantages and disadvantages that are felt by the community when using cooperatives.
Definition of Cooperative
Before knowing the types of cooperatives, it would be better if you know in advance from the cooperatives themselves. After knowing the meaning of cooperatives, you can more easily identify the types of cooperatives that exist.
Knowing the type of cooperative is by understanding its meaning first.
Not only based on the environment, but there are also various other types that can be understood after knowing the meaning of cooperatives.
The definition of a cooperative is a business entity consisting of a group of people whose activities are based on cooperative principles as well as a people’s economic movement based on kinship. This definition is described in Law no. 25 of 1992.
Analyzing cooperatives, it is also necessary to study several opinions regarding the meaning of cooperatives.
In addition to the understanding according to Law no. 25 of 1992, there are also other understanding opinions from state figures.
Mohammad Hatta, who is the father of Indonesian cooperatives, believes that cooperatives are a type of joint business entity that uses the principles of kinship and mutual cooperation. The two opinions regarding the meaning of cooperatives are basically quite similar.
Types of Cooperatives Based on the Environment
Knowing the 3 special cooperatives is a necessary step to getting to know the world of cooperatives better.
Apart from this type, cooperatives are also classified into several other types.
Starting from the type of cooperative based on its function and based on the type of business into a cooperative classification. Here are some types of cooperatives based on their environment that you can learn about.
The first type of cooperative that includes types of cooperatives based on their environment is functional cooperative.
These cooperatives are usually located or operate on a limited basis in a certain institution such as a company or a certain service.
Some examples of functional cooperatives that are widely known are the Civil Servant Cooperative (KPN) and the Army Cooperative (KOPAD).
The operational process of functional cooperatives is also similar to other cooperatives, the difference is only in the scope of operation.
The process of operating functional cooperatives is also often assisted by using an android accounting application even though the members it has been very limited.
Starting from savings and loan activities carried out in this cooperative with members who specifically come from the agency.
Village Unit Cooperatives (KUD)
KUD is a type of cooperative that is well known by the public. As the name suggests, village unit cooperatives are cooperatives that operate within the scope of one particular village.
Village unit cooperatives not only provide savings and loans but also provide various counseling for their members.
The counseling carried out is related to community activities.
KUD is also involved in agriculture and plantations, which are usually the fields most of its members are involved in.
The counseling carried out is also related to this field such as agricultural and animal husbandry techniques so that members can be more advanced.
This KUD is not limited to agriculture and plantations but also supports other fields such as animal husbandry and fisheries.
Almost every villager can become a member of this cooperative.
In addition to KUD, school cooperatives are also a type of cooperative that is very familiar to various circles.
Unlike other types of cooperatives, which are financial institutions with legal entities, school cooperatives do not have legal entities.
School cooperatives often use accounting software that is often used in companies in their operational activities.
Members owned by school cooperatives are usually students who are enrolled in the school.
If other cooperatives provide savings and loan services, school cooperatives usually focus more on saving savings services.
There is a special purpose when creating a school cooperative, which is to train students to be able to run a general cooperative.
Not only the members, the cooperative administrators also usually come from the school’s own students. This school cooperative was created to train and educate students.
With school cooperatives, students are expected to be able to manage various activities in a cooperative.
Although not 100% have the exact same activities as general cooperatives, the operational process of school cooperatives is quite close to that of general cooperatives.
Those are the 3 types of cooperatives which include types of cooperatives based on their environment, namely functional cooperatives, school cooperatives, and village unit cooperatives.
These three cooperatives are still running in the community and are among the most recognized types of cooperatives.
Other Types of Cooperatives
In addition to the types of cooperatives based on their environment, there are several other types of cooperatives that also operate in the community. Some of these types include the following:
- Cooperatives based on the business field
- Cooperatives by cooperative level
- Cooperatives based on the number of business fields
Among the cooperatives that include types of cooperatives based on their environment, namely KUD, school cooperatives, and functional cooperatives, there are also some that are often associated with other types of cooperatives. But basically, these three types have different specifications.
The other three cooperative specifications also have several types of cooperatives under them that are still operating in Indonesia. The following are some of the types of cooperatives.
Cooperatives by Field or Nature of Business
- consumption cooperative
- Credit cooperative
- Production cooperative
Cooperatives Based on Number of Business Fields
- Single-purpose cooperative
- Multi-purpose cooperative
Cooperatives Based on Cooperative Level
- Primary Cooperative
- Cooperative Center
- Cooperative Association
- Parent Cooperative
None of the above types of cooperatives are included in the types of cooperatives based on their environment, namely the three cooperatives discussed earlier. However, even though they are not the same, these types of cooperatives are often linked both in terms of membership and operations.
When learning various things about the world of cooperatives, knowing the history of cooperatives is also important. In Indonesia, cooperatives are one of the financial institutions with a very important role in the community.
The history of cooperatives in the world first began in the 18th to early 19th centuries. However, of course, there is no grouping of cooperatives that includes the types of cooperatives based on their environment, namely the three cooperatives discussed earlier.
Cooperatives were first referred to as pre-industrial cooperatives and began to exist in several countries. In England, 1844 became the first year the cooperative was founded in the city of Rochdale.
Through this cooperative in Rochdale, several cooperative principles were finally born.
It is not clear whether cooperatives that are classified as types of cooperatives based on their environment, namely cooperatives in Indonesia are also the same as cooperatives in Rochdale or not.
But the cooperative in Rochdale was known to be more like a joint venture at the time.
During the operation of the cooperative in Rochdale, there were several principles that were used by all members in the building of the cooperative. These principles include:
- Membership is open
- Operational supervision is democratic
- Limited interest with capital from fellow members
- The remaining operating results are divided based on the amount of each member’s contribution to the cooperative
- Sales of goods are adjusted to the prevailing market prices
- Payment for sales must be made in cash
- There is no discrimination in ethnicity, race, religion, and political flow
- The goods traded are genuine goods, it is strictly forbidden to sell counterfeit or imitation goods
- All members receive continuous education
All of these principles apply to every cooperative which includes types of cooperatives based on their environment, namely cooperatives that exist in various parts of the world.
This principle was later ratified in 1937 at the congress of the International Co-operative Alliance (ICA).
In Indonesia, cooperatives were first established in the form of credit cooperatives in 1896 by a governor of Purwokerto, namely R. Aria Wiriaatmadja.
This cooperative was created with the aim of helping people who were experiencing economic difficulties at that time.
A cooperative was also established in 1911 by the Islamic Trade Union (SDI) to make it easier for traders to do business.
This cooperative is also not similar to a village unit cooperative.
Unfortunately, the two cooperatives that had been established did not run smoothly. The actions of cooperatives in Indonesia only ran smoothly in 1947 after Indonesia experienced independence.
Slowly but surely, the role of cooperatives is getting stronger in Indonesia today.
Cooperative Objectives and Functions
As previously explained, the three cooperatives above and other types of cooperatives were created with a specific purpose. Each cooperative has its own role in society.
There are several goals that are owned by the formation of a cooperative. These goals include:
- Improving people’s economic conditions
- Improving the welfare of cooperative members
- Helping people to get various products more easily
- Help manufacturers to get higher product price quotes
- Helping consumers to get products at affordable prices
- Helping the community through capital loan assistance
- Helping to stabilize the economic condition of the community through the savings and loan program
The purpose of this cooperative applies to every cooperative including the types of cooperatives based on their environment, namely KUD, school cooperatives and functional cooperatives.
This goal is also the basis for determining the various rules of the cooperative program that are running.
In addition to the above objectives, cooperatives also have several functions both for members and for the general public. The functions of the cooperative include:
- Developing the potential and talents of cooperative members
- Improving the quality of human resources in the community actively
- Strengthening people’s economic resilience
- Creating and developing the community’s economy
Each of the existing goals and functions is basically made by taking into account the general economic conditions of all people in Indonesia.
This also applies to cooperatives which include types of cooperatives based on their environment, namely the previous three cooperatives.
Cooperative Legal Basis
In Indonesia, cooperatives are one of the financial institutions with legal entities so their presence is regulated by various regulations and laws.
There are several basic cooperative laws that apply in Indonesia, including:
- Law Number 25 of 1992 concerning Cooperatives
- Government Regulation Number 17 of 1994 concerning the dissolution of cooperatives by the government
- Government Regulation Number 4 of 1994 concerning Requirements and Procedures for Ratification of the Deed of Establishment and Amendment to the Articles of Association of Cooperatives
- Government Regulation No. 9/1995 on the implementation of savings and loan business activities by cooperatives
- Government Regulation Number 33 of 1998 concerning Equity Participation in Cooperatives
- Decree of the Minister of Cooperatives and SMEs No. 98 of 2004 concerning notaries making cooperative deeds
- Regulation of Cooperatives and SMEs Number 10 of 2015 concerning Cooperative Institutions
- Regulation of Cooperatives and SMEs Number 15 of 2015 concerning Savings and Loans by Cooperatives
- Regulation of Cooperatives and SMEs Number 9 of 2018 concerning Cooperative Management and Development
- Ministerial Decree No. 22 of 2020 concerning Procedures for submitting data on cooperative debtors in the context of providing interest subsidies/margin subsidies for credit/financing for micro, small and medium enterprises in order to support the national economic recovery program
In various applicable legal bases, various matters related to the world of cooperatives are described in detail, including cooperatives which include the types of cooperatives based on their environment, namely the 3 cooperatives above. Some regulations are also spelled out separately.
Through the several legal bases above, various matters ranging from the rules for establishment and dissolution, and operational needs, to legal sanctions for violations are also discussed quite clearly.
Legal bases that are no longer relevant are also frequently updated regularly.
Similar to other financial institutions, cooperatives are also supervised by financial regulators in Indonesia such as the OJK and Bank Indonesia.
This applies to all Functional cooperatives.
That’s some information about the legal basis in force in Indonesia related to cooperative operations.
The purpose of cooperatives is closely related to the community so that various legal bases are created and closely monitored.
Various types of cooperatives KUD and other cooperatives are made on the principle of mutual cooperation and kinship.
This makes cooperatives quite widely used on an ongoing basis by the community.
Cooperatives which are usually operated by specially selected community members also usually make the community more comfortable doing various transactions in it.
Starting from saving activities to capital loans, it is considered more comfortable to do.
The three cooperatives above have been running for a long time in Indonesia.
The various programs made in the cooperative also usually adapt to the needs of economic development.
Several cooperatives have different programs depending on the economic development needs of the community in the area concerned. Although different, each program always refers to the overall goals of the cooperative.
Getting to know KUD, school cooperatives, and functional cooperatives can add useful knowledge.
Understanding information about cooperatives can be useful for understanding the world of the economy more deeply.
Those were the types of cooperatives based on their environment.
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