The Potency Of Economies in the Cooperative System

The potency of economies lies in the people. Thus, the prosperity of the people indicates the success of the system. This is one of the objectives in the field of co-operative economy. To achieve this end, cooperatives work as organizations which operate by pooling or accumulating in parts of the larger yet venous system. For many different types of Indonesian cooperatives, every part and member are responsible for the primary and operational budget, and the amount and pooling frequency are set and agreed upon by all members.

The co-operative system ensures equal rights for all members. According to the Indonesian Republic’s Cooperative Law Act 25 of 1992, every member holds equal rights and responsibilities by the Articles of Association. The general rights of each member include to attend the Annual Member Conference, to choose or to be chosen as the executive committee, and to express opinions in the conference or to the executives. It is the responsibility of each and every member to maintain and cultivate the principle of fellowship in the organization.

As stipulated in the same Law, the requirement of founding a cooperative is having a minimum of 20 registered members. The membership should be open and voluntarily, meaning that every member gets involved based on their own and personal will. Openness in cooperatives means that there is no discrimination of any form to the members. To allow the organization system to run accordingly, the cooperative gathers its members based on similar business interests and purposes, so every member is willfully bound to participate in the business activities.

Cooperative as an organization

As a business organization, a cooperative is an economic institution. When running the business, a cooperative bases its operation on the rational economic theory, including the principles of effectiveness and efficiency, to achieve the optimum results. Meanwhile, as stated above, the objection of a cooperative institution is to make the members prosper because a cooperative is a pool of people, rather than a pool of funds. Therefore, the profit earned is dedicated to the life of the organization itself, and for the members, the profit is shared in the form of surplus revenue.

Why cooperatives are important for the economy

The noble purpose of cooperatives’ objectives is to foster the economy of the social environment. It is hoped that through the cooperative system, the national economy is supported and sustained. This is the reason why cooperatives are somehow identical to MSMEs. Small and medium businesses are united by their same vision of sharing economy in the traditional way of collecting funds independently. The shared characteristics between cooperatives and MSMEs bring the two together to unlock their potential of economies of scale.

Potential aspects of partnerships

Today, there are many ways to improve the life expectancy of cooperatives, especially in terms of business partnerships. Prevailing business institutions that provide services are obliged to focus on administering the credit and loan needs of small businesses. If a cooperative organization and its dedicated members adhere to the requirements, then it can be an effective way to scout promising clients for the business institutions.

Tokoin brings together the convenient ‘meet-the-needs’ concept between Tokoin’s users and its partners, such as financial institutions, insurance companies, and property business. To accelerate the growth of MSMEs, Tokoin affords membership opportunities for MSMEs to build reputation digitally and accordingly.

Thus, Tokoin will facilitate both cooperatives and the MSME sector in meeting their needs. By means of Tokoin’s blockchain platform, MSMEs will be supported in solving their problem of accessing credit, while cooperatives will be assisted with a trusted platform to build a digital ecosystem equipped with effective market solutions. 

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Author: Tokoin Official

TOKOIN is a platform that establishes the identity of MSMEs as an acceptable reputation in the business ecosystem. TOKOIN presents a better and modern business ecosystem that offers valuable partnerships to address inclusive growth. As a platform, TOKOIN captures and processes business information from the users as a valuable asset, which, in our ecosystem, translates to the trusted reputation of the MSMEs as our users to access previously inaccessible financial business services from providers which act as our partners. Therefore, TOKOIN links the business and financial sectors to launch a scheme of financial inclusion. The partnerships formed in TOKOIN will subsequently contribute to the national economic growth.

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