Case of Indosurya Savings and Loan Cooperative

The case of default has returned again, this time happened to the Indosurya Cipta Savings and Loan
Cooperative (ISP) who failed to pay obligations to its customers. In fact, as a result of this case, ISPs had
to lay off majority of their employees.

This bitter news was revealed on February 24, 2020, when the ISP issued a memo to its customers that the
refund must be extended 6 months to 4 years. The extension is carried out depending on the amount of
funds placed. After that the ISP issued a new memo, the contents of the refund were no longer extended
but were repaid in 3-10 years. Ironically, customer refunds are carried out without interest.

Many of its employees are also banking marketing graduates. So that ISPs can easily attract banking
customers' funds by offering interest slightly higher than the interest offered by banks. Indeed, based on
ISP's financial statements in 2018 the amount of deposits reached 10.4 trillion. But it is strange to see the
distribution of loans of only 30-40 billion rupiah per month.

The Ministry of Cooperatives and SMEs as regulators of cooperative business entities, in fact has found
violations since 2018. Special Staff of the Ministry of Cooperatives and SMEs Agus Santoso revealed, his
party had conducted an inspection of KSP Indosurya Cipta on 26-30 November 2018.

From the results of the inspection, administrative violations were found. On February 26, 2019, KSP
Indosurya was subjected to administrative sanctions in the form of the first warning to immediately
correct some of the findings.

On February 19, 2020, the Deputy Minister for Supervision of the Ministry of Cooperatives stated that
they had re-monitored and requested the KSP Indosurya Cipta to submit documents in the form of
financial statements as of December 31, 2019, Financial Reports to date, and plans for completion or
payment schedule to members.

In addition, in February 2020, the Deputy for Supervision also delivered a letter to the Indosurya
Cooperative regarding an appeal to immediately hold an annual member meeting (RAT) and report on the
current condition of the cooperative. However, until now there has been no confirmation from the
management of Indosurya KSP.

In March and April 2020, Kemenkop and UKM received a letter of complaint from Indosurya KSP
members through the PPID channel. It contained, asking the ministry to immediately follow up and
resolve the Indosurya KSP case.