There has always been a long-standing, widespread and deeply entrenched custom of gotong royong (co-operation) in Indonesian culture. Gotong royong was mostly practiced through social activities in villages such as building roads, mosques, churches and other communal or public facilities. The formal cooperative movement in Indonesia arrived in the country during the colonial period. It was first introduced when The Bank for Civil Servants (now Bank BRI), a savings and loan cooperative in Purwokerto on the Java island was established by Aria Wiriatmadja in 1896 to tackle the problem of loan sharks that were driving people into debt and despair.
Since then the cooperatives have grown into a mass movement – the data from 2018 shows that the movement consists of around 123 thousand enterprises with a combined membership of 26 million members. The sector is dominated by savings and loan cooperatives, that have a distinct focus on promoting the spirit of saving. Although there are challenges with capacity and capability, growth has been impressive: the contribution of cooperatives to the country’s GDP has increased from 1,8% in 2014 to 5,1% in 2019.
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