Cooperatives are an association of businesses with the principles of the people's economy, also know its principles and objectives

Kapanlagi.com - Cooperatives play an important role in the economic system in Indonesia. In fact, cooperatives are often referred to as the backbone of Indonesia's economy. However, many people still do not understand what cooperatives actually are. In short, cooperatives are associations that sell various needs of their members.

In general, the purpose of establishing cooperatives is to fulfill the needs of their members. Therefore, in our daily lives, we often encounter various types of cooperatives with diverse products depending on the background of their members. For example, school cooperatives sell school supplies, and agricultural cooperatives sell agricultural needs (source).

Furthermore, there are still many interesting things related to cooperatives that are worth studying. What are they? Summarized from various sources, here is the review.

1. Definition of Cooperatives

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As the backbone of the economy, cooperatives have various understandings. Based on the origin of the word, cooperatives come from the English word 'co-operation' which means 'collaboration'. Meanwhile, in the Indonesian Dictionary (KBBI), the meaning of cooperatives is an association formed with the aim of meeting the needs of its members by selling daily necessities at low prices.

Explanation about cooperatives is also stated in Law number 25 of 1992. In that law, the meaning of cooperatives is a business entity consisting of individuals or cooperative legal entities, based on cooperative principles as well as a people's economic movement based on the principle of family.

In line with the explanations above, Mohammad Hatta, a figure known as the Father of Cooperatives, referred to cooperatives as a joint effort with the aim of improving the fate of economic livelihoods based on the principle of mutual assistance.

2. Cooperative Principles

In Law number 25 of 1992, not only explained that a cooperative is a business entity that operates based on cooperative principles and also as a movement of the people's economy. In that law, there are also principles of cooperatives.

The principles of cooperatives are as follows.

1. Cooperative membership is open and voluntary.

2. The management process is carried out democratically.

3. The provision of benefits to members is adjusted to the members' capital.

4. Distribution of surplus (SHU) emphasizes fairness according to the performance of each member.

5. Self-reliant. Cooperatives are self-help business entities that are autonomous and independent.

6. Cooperatives can organize education and training.

7. Cooperatives strengthen the movement through collaboration.

3. Cooperative Goals

In addition to understanding its principles, it is also important to know the goals of establishing a cooperative. As a business entity based on cooperative principles and as a movement of the people's economy, cooperatives certainly have noble goals.

The goals of a cooperative are as follows:

1. Helping to improve the living standards of cooperative members and the surrounding community.

2. Assisting the economic needs of cooperative members.

3. Assisting the government in realizing a just and prosperous society.

4. Participating in building the national economy.

5. For producers, cooperatives can be a place to offer goods at profitable prices.

6. For consumers, it can be a place to obtain quality goods at lower prices.

7. For small businesses, cooperatives can be a place to obtain lightweight business capital and engage in joint ventures.

4. Types of Cooperatives

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In addition to Law number 55 of 1992, explanations related to cooperatives are also contained in Law number 17 of 2012. In that law, the classification of types of cooperatives is included.

The types of cooperatives are as follows.

1. Multi-Purpose Cooperatives
Multi-purpose cooperatives are cooperatives that provide several services at once. Starting from selling consumer goods, providing savings and loan services, to providing other services.

2. Savings and Loan Cooperatives
Savings and loan cooperatives are cooperatives that provide special storage and lending services for their members. Members who need short-term money can borrow with easy conditions and low interest rates.

3. Consumer Cooperatives
Consumer cooperatives are cooperatives intended for consumers of goods and services. In this type of cooperative, members act as owners as well as buyers or consumers. Consumer cooperatives usually sell various daily needs such as basic foodstuffs and other daily needs.

4. Producer Cooperatives
Producer cooperatives are cooperatives intended specifically for producers of goods and services. Therefore, this cooperative will only sell goods produced by its members. Members of this cooperative can obtain cheap raw materials and sell their products at fair prices.

5. Advantages of Cooperative Members

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Being a cooperative member can provide many advantages. This is because a cooperative is an association or economic body that upholds the principles of people's economy and mutual assistance.

Some of the benefits of being a cooperative member are as follows:

1. Being a cooperative member can save expenses. Because every member can buy goods at the cooperative at a cheaper price.

2. Being a cooperative member can also be a business training platform and expand business relations.

3. Cooperative members are entitled to receive Surplus of Business Results (SHU). The amount of SHU is based on the amount of capital invested and the profits earned by the cooperative. Therefore, it is relatively fair.

4. Members can apply for loans at the cooperative, which are relatively more profitable due to low interest rates, so the loan installments are relatively smaller.

That is the explanation of the definition of a cooperative as a business entity that upholds the principles of the people's economy. Hopefully, it is useful and can increase knowledge.

(kpl/psp)