A Review of the Challenges and Government Initiatives to Empower Women’s Cooperatives in Indonesia & Future Research Suggestions

A Review of the Challenges and Government Initiatives to Empower Women’s Cooperatives in Indonesia & Future Research Suggestions

Leviana Andrew, Siti Fatimah Abdul Latiff , Azlina Bujang, Norfarahzila Mohd Zamri, Darrold Hansen Mathew

Universiti Teknologi MARA Cawangan Sarawak, Malaysia

DOI: https://dx.doi.org/10.47772/IJRISS.2025.9010297

Received: 16 January 2025; Accepted: 20 January 2025; Published: 20 February 2025

ABSTRACT

This study reviewed the pivotal role of women’s cooperatives in empowering women economically and socially in Indonesia. Women’s cooperatives provide vital platforms for women to engage in micro, small, and medium enterprises (MSMEs), offering access to capital, training, and markets while fostering financial independence and decision-making autonomy. The paper highlights the diverse contributions of women’s cooperatives, including their roles in enhancing livelihoods, promoting gender equality, and preserving cultural heritage through initiatives like traditional crafts and food production. Notable examples such as PEKKA and Seruni illustrate how these cooperatives have successfully uplifted marginalized women, enabling them to assume leadership roles and advocate for community development.  Despite their impact, women’s cooperatives face challenges such as inadequate education and training, market competition, and limited institutional support. Government initiatives, including the Mentoring Program and Promotion of Export Opportunities, have played a critical role in addressing these obstacles, offering financial assistance and capacity-building opportunities. The study underscores the need for integrated support systems, enhanced market access, and stakeholder collaboration to maximize the potential of women’s cooperatives. By empowering women and fostering inclusive economic growth, these cooperatives contribute significantly to Indonesia’s broader development goals, serving as a model for gender-focused cooperative movements globally.

Keywords:  Women’s cooperatives, Economic Empowerment, Gender Equality, Community Development, Indonesia

INTRODUCTION

Women’s cooperatives in Indonesia serve as platforms for women to start businesses, engage in micro, small, and medium enterprises (MSMEs), and participate actively in the economy. They also provide access to capital, training, and market opportunities, enabling women to enhance their livelihoods. Women’s cooperatives contribute approximately 4.48% to Indonesia’s GDP and employ around 0.5% of the workforce. With over 123,000 cooperatives registered, more than 13,000 are specifically focused on empowering women (Ida, 2021). The existence of women’s cooperatives will strengthen women’s participation in the public sphere without leaving their functions as women (Mursyidin et al., 2023). In Indonesia, women’s cooperatives aim to enhance women’s living standards by providing savings and business capital loans, thereby fostering the growth of the micro and medium-sized economy. For every woman who joins as a member of the cooperative, women’s cooperatives are formed based on aspects of decision-making in increasing women’s independence without intervention by men. Women’s cooperatives are cooperatives consisting of women whose members are expected to be able to contribute to increasing family income and overcoming economic problems by prioritizing the fulfillment of daily life (Nurliana et al., 2022). A similar view was also expressed by Juwairiyah et al (2022) regarding the contribution of women, which is very important and has a big influence on economic activities in various sectors, both in the business sector, agriculture, and other sectors. Women’s economic empowerment exists as a form of realizing gender equality, poverty alleviation, and inclusive economic growth. The presence of women’s cooperatives aims to help improve the household economy and realize gender equality because women have the freedom to make decisions in economic activities in the various sectors, they are involved in. Moreover, women’s cooperatives in Indonesia are vital for fostering economic growth, empowering women, and preserving cultural heritage. They provide essential support to women, enabling them to overcome barriers and actively participate in the economy. As these cooperatives continue to evolve, they hold the potential to significantly impact women’s roles in Indonesian society and contribute to broader economic development goals (Ida, 2021).

This paper examines how women’s cooperatives in Indonesia serve as instruments to economically and socially empower women, particularly those in marginalized communities, and highlights the diverse roles of women’s cooperatives, including providing access to capital, fostering entrepreneurship, preserving cultural heritage, and promoting community development.  It also investigates the obstacles faced by women’s cooperatives and evaluates the effectiveness of government initiatives in enhancing their impact.  Through case studies, the paper demonstrates the tangible outcomes of women’s cooperatives in improving livelihoods, fostering gender equality, and preserving cultural traditions.

WOMEN’S COOPERATIVES AND THEIR ROLE IN SOCIOECONOMIC DEVELOPMENT

Women’s cooperatives in Indonesia play a vital role in socioeconomic development, encompassing three key themes: economic empowerment, social impact, and cultural preservation & sustainability.

Economic Empowerment

Women’s cooperatives in Indonesia primarily aim to empower women economically. These cooperatives provide women with opportunities to engage in various economic activities, helping them gain financial independence and improve their standard of living. A women’s cooperative is a form of women’s empowerment in improving the economy of pre-prosperous women, where women are a marginalized group and face difficulty getting access to business capital loans, impacting their welfare. The presence of a women’s cooperative is a solution to open access to capital provision for underprivileged women to improve their standard of living (Mursyidin, Dedy & Riki, 2023).

Data from the Ministry of Cooperative and Small Medium Enterprise (SME) in 2021 revealed 13,212 active women’s cooperatives in Indonesia. These cooperatives play a crucial role in providing economic opportunities, access to capital, and support for women entrepreneurs. They are involved in various sectors such as finance, agriculture, and small-scale industries. The Indonesian government has been actively promoting the growth of these cooperatives as part of broader efforts to enhance gender equality and improve the economic participation of women (Ida, 2021).

Women’s cooperatives in Indonesia create significant employment opportunities, especially in rural areas where options are limited. This employment contributes to women’s economic empowerment and helps reduce poverty, ultimately leading to improved living standards for cooperative members and their communities. The income generated from cooperative employment helps improve the financial stability of women and their families, contributing to poverty alleviation.

Women’s cooperatives in Indonesia are engaged in diverse business sectors, reflecting the varied needs and skills of their members. A significant number of these cooperatives are involved in agriculture, encompassing crop cultivation, organic farming, and animal husbandry. These cooperatives produce and market a range of agricultural products, including fruits, vegetables, spices, and dairy, contributing to both local and regional food security. Women play a pivotal role in these agricultural activities, serving as farmers, producers, and entrepreneurs. Their participation in cooperatives enhances food and nutrition security by increasing agricultural production and improving livelihoods. Agricultural cooperatives empower women by providing access to resources, training, and markets, enabling them to diversify their income-generating activities. This improves their economic status and enhances food availability within their communities (Kalhoff & Zelalem, 2021).

The involvement of women in agricultural cooperatives significantly contributes to increased food production and availability, which is crucial for addressing poverty and hunger in rural areas. These cooperatives often collaborate to improve agricultural practices and market access, thereby enhancing food security at both local and regional levels (Akpama & Isaac, 2018). Furthermore, many women’s cooperatives provide financial services, such as microloans, savings schemes, and insurance, to their members. These services help women start or expand small businesses, manage household finances, and cope with financial emergencies. This also enhances financial literacy and stability among women in rural and urban communities.

Social Impact

Women’s cooperatives not only focus on economic activities but also serve as platforms for women to address social issues, access education, and advocate for their rights (Ida, 2021). The existence of these cooperatives is vital for enhancing women’s participation in the economy, helping to overcome barriers such as limited access to finance and social protections, and fostering community development through collective action.

Furthermore, women’s cooperatives in Indonesia primarily aim to promote gender equality. They advocate for gender equality by enabling women to participate in decision-making processes, both within the cooperatives and in the broader community (Setyaka, 2021). In addition, women’s cooperatives in Indonesia also enhance social inclusion by creating platforms for women, especially those in marginalized communities, to engage in social and community activities. This engagement promotes social inclusion and fosters a sense of belonging and empowerment among members.

Women’s cooperatives in Indonesia often serve as crucial community hubs and foster social interactions within their communities. Besides that, some cooperatives offer social services, such as child care, education, and health initiatives, which benefit not only members but the broader community. Some cooperatives operate childcare facilities, enabling women to participate in cooperative activities while ensuring their children are cared for. This support is crucial for women’s economic empowerment. Cooperatives often organize educational programs, such as literacy classes, vocational training, and financial literacy workshops. These initiatives help improve the skills and knowledge of members, enhancing their employability and entrepreneurial potential. Examples of cooperatives providing social services include Koperasi Wanita Serba Usaha “Setia Budi Wanita” in East Java, which operates childcare facilities and provides health services for members and their families, and Koperasi Wanita Tani Maju Bersama in West Sumatra, which offers educational programs, such as literacy classes and vocational training, to empower women and improve their livelihoods (Faqih, 2019).

One example of a new cooperative movement to achieve gender equality and social inclusion in Indonesia is the Lumajang Rural Community Movement (Gemapalu). According to Misbach Isnaifah (Isna), one of the founders and movers, Gemapalu is a social community organization that is proactive in empowering the community, especially women. More than 90% of Gemapalu members are agricultural laborers, and 65% of them are female farm workers. Gemapalu has assisted the community until now it has more than 1,500 active members with assets spread across 183 Neighborhoods, 25 Villages, 12 Sub-districts, and 3 districts (Setyaka, 2021).

Cultural Preservation & Sustainability

Women’s cooperatives in Indonesia also play a significant role in preserving local culture and traditions, which in turn creates interactions and engagement with their communities. Through their involvement in businesses like handicrafts and traditional food production, these cooperatives help maintain cultural heritage and ensure it is passed on to future generations. Many cooperatives organize cultural events and festivals to showcase their products and celebrate traditions. These events create opportunities for community members to come together, participate in cultural activities, and take pride in their heritage.

Examples of cooperatives engaged in cultural preservation include Koperasi Wanita Karya Handayani in Central Java, which focuses on batik production and preserving this traditional textile art form, and Koperasi Wanita Tani Maju Bersama in West Sumatra, which engages in the production of traditional foods, ensuring the continuation of local culinary heritage. By engaging in these cultural preservation activities, women’s cooperatives in Indonesia foster a sense of community identity, promote intergenerational knowledge transfer, and create economic opportunities that sustain traditional practices. This interaction with the community is essential for maintaining the richness and diversity of Indonesian culture.

Examples of women’s co-operatives @ self-help groups in Indonesia

Here are some notable examples of women’s cooperatives and self-help groups in Indonesia. Table 1 below illustrate the diverse ways in which women’s cooperatives and self-help groups contribute to the economic and social empowerment of women in Indonesia, while also fostering community development and cultural preservation. Indonesia has seen several successful stories of empowering women through cooperatives and self-help groups.

Table 1:  Successful Women’s Cooperatives in Indonesia

CHALLENGES FACED BY WOMEN’S COOPERATIVES IN INDONESIA

Women’s cooperatives in Indonesia face several challenges that hinder their growth and effectiveness.  These challenges are listed in Table 2:

Table 2:  Challenges of Women’s Cooperatives in Indonesia

INDONESIAN GOVERNMENT INITIATIVES

Government Initiatives in Indonesia aimed at supporting women’s cooperatives are multifaceted and focus on enhancing economic empowerment, improving management capabilities, and fostering sustainable business practices.  Table 3 highlights some key aspects of these initiatives:

Table 3:  Government Initiatives to Support Women’s Cooperatives in Indonesia

Relationship between Government Initiatives and Challenges

The following matrix illustrates how various government initiatives tackle multiple challenges faced by women’s cooperatives in Indonesia:

Table 4:  Government Initiatives and Challenges Matrix

Notes:

●= Primary Impact (Direct address of challenge)

○ = Secondary/No Impact

The matrix demonstrates how government initiatives work synergistically to address multiple challenges:

Mentoring Programs primarily address four key challenges:

• Poor management skills through hands-on guidance
• Heavy reliance on savings and loans by introducing business diversification strategies
• Lack of training through structured learning programs
• Cultural barriers through coaching programs

Export Opportunities initiatives tackle:

• Market access issues by opening international markets
• Limited access to capital through export financing
• Dependence on external support by creating sustainable business models

Legislative Support and Gender Equality Initiatives focus on:

• Cultural barriers through policy reform
• Dependence on external support by creating enabling environments

CSO Collaboration addresses:

• Cultural barriers through community engagement
• Limited access to capital through alternative funding sources
• Dependence on external support through capacity building

ICT Training Programs help overcome:

• Poor management skills through digital literacy
• Market access issues through e-commerce capabilities
• Lack of training through technology-based learning

This integrated approach shows how government initiatives create a comprehensive support system that addresses multiple challenges simultaneously, maximizing their impact on women’s cooperatives.

SUGGESTIONS FOR FUTURE STUDIES

The empowerment of women’s cooperatives in Indonesia is significantly influenced by various government initiatives and policies aimed at enhancing the socio-economic status of women. These influences manifest through financial support, training programs, regulatory frameworks, and initiatives that promote gender equality. Research on empowering Indonesian women’s cooperatives can be expanded through various avenues to enhance understanding and effectiveness. Here are some suggestions for future studies:

Impact Assessment of Government Policies

Investigate the effectiveness of specific government policies aimed at supporting women’s cooperatives. This could include evaluating the outcomes of financial assistance programs, training initiatives, and regulatory frameworks on the growth and sustainability of these cooperatives.

Role of Education and Training

Examine the influence of educational programs and training on women’s leadership within cooperatives. Research could focus on how these programs improve management skills, financial literacy, and overall cooperative performance, as well as identify best practices that can be replicated across different regions.

Barriers to Participation

Conduct qualitative studies to explore the barriers women face in participating in cooperatives. This could involve understanding cultural, social, and economic factors that limit their involvement and identifying strategies to overcome these challenges.

Case Studies of Successful Cooperatives

Develop detailed case studies of successful women-led cooperatives in Indonesia. These studies can highlight best practices, innovative approaches, and the role of community support in fostering cooperative success.

Intersectionality in Women’s Cooperatives

Explore how factors such as ethnicity, socio-economic status, and geographic location intersect to affect women’s experiences in cooperatives. This research could provide insights into tailored interventions that address the diverse needs of women across different contexts.

Technology Utilization

Investigate how technology can enhance the operations and market reach of women’s cooperatives. Research could focus on digital platforms for marketing, e-commerce solutions, or mobile applications that facilitate communication and resource sharing among members.

Longitudinal Studies

Implement longitudinal studies to track the progress of women’s cooperatives over time. This would provide valuable data on the long-term impacts of empowerment initiatives and help identify trends in women’s economic participation.

By pursuing these research avenues, scholars can contribute to a deeper understanding of the dynamics at play in empowering Indonesian women’s cooperatives and offer actionable recommendations for policymakers and practitioners.

CONCLUSION

Women’s cooperatives in Indonesia play a crucial role in driving social and economic change, empowering women, and preserving cultural heritage. They operate across various sectors, providing livelihoods and fostering community development. Despite challenges like limited funding and managerial issues, successful initiatives demonstrate their potential for inclusive growth. To achieve widespread impact, collaboration between government, civil society, and cooperatives is essential to address systemic barriers and build robust support networks. Three key actionable steps are recommended: (1) establish regional cooperative support centers to provide localized training and mentorship, (2) develop an integrated digital platform to enhance market access and operational efficiency, and (3) create formal partnerships between cooperatives and established businesses for sustainable growth. These targeted interventions will enable women’s cooperatives to contribute significantly to national development and serve as global models for gender-focused cooperative development.

REFERENCES

1. Andrew, L., Yusuf, M. J., Bujang, A., Ibrahim, W. M. F. W., Hassan, S. S., Ali, J. K., & Yacob, Y. (2024). The state of women’s co-operatives in Malaysia: Challenges and opportunities. International Journal of Academic Research in Economics and Management Sciences, 13(1).
2. Anggraini, F., Puttri, D., Novianti, N., & Helmi, S. (2023). Effect of women’s entrepreneurship practices on information communication technology (ICT) adoption during the COVID-19 pandemic: A case study in West Sumatra, Indonesia. Journal of Economics, Finance and Management Studies, 6(6), 2954-5963.
3. Akpama, B. C., & Isaac, O. (2018). Women’s participation in agricultural cooperative activities and rural development in Cross River State, Nigeria. Journal of Educational System, 2(3), 15-21.
4. Bujang, A., Andrew, L., Johari, A., Ali, J. K., & Yacob, Y. (2024). Empowering women through digital cooperation: A case study of Sarawak women’s cooperatives and ICT integration. International Journal of Academic Research in Business and Social Sciences, 14(8), 2904-2908.
5. Faqih, M. (2019). Penilaian kinerja koperasi wanita serba usaha “Setia Budi Wanita” Jawa Timur. Jurnal Ilmiah Mahasiswa Fakultas Ekonomi dan Bisnis Universitas Brawijaya.
6. Firdaus, E., Artina, D., Rauf, M. A., Separen, S., & Wijaya, T. T. (2024). Has women’s participation in local government been strengthened? A legal and political analysis in Riau Province. Journal of Indonesian Legal Studies, 9(1), 155-186.
7. Gijanto, P. S., & Nataliningsih, N. (2023). The role of women’s cooperatives as an institution to empower women in supporting the achievement of the SDGs. Journal of Sustainable Development, 3(2), 45-53.
8. Holst, A. (2024). Strengthening economic opportunities for women entrepreneurs through cooperatives.
9. Ida, H. (2021). The innovation of women-based cooperative: Enhancing the role of women in economic development in the digital era. The First International Conference on Government Education Management and Tourism (ICoGEMT), Bandung, Indonesia, 189-199.
10. Juwairiyah, I., Andrianto, M., & Syahfitri, R. (2022). Peran perempuan dalam membangun UMKM di Kota Tanjungpinang. Jurnal Humaya: Jurnal Hukum, Humaniora, Masyarakat, dan Budaya, 2(2), 150-160. https://doi.org/10.33830/humayafhisip.v2i2.3838
11. Kollhof, P., & Zelalem, F. (2021). Stronger together: Converging women’s cooperatives and agroecology to create gender-transformative food systems. International Development Studies, The George Washington University.
12. Kurimoto, A., & Dongre, Y. (2020). Emerging Asian Pacific cooperative models from a global history perspective. In Waking the Asian Pacific Co-Operative Potential. INC. https://doi.org/10.1016/b978-0-12-816666-6.00004-5
13. Ministry of Cooperatives and SMEs Programs. (2023). Ministry of Cooperatives and Small and Medium Enterprises, Republic of Indonesia. Retrieved from Kemenkop UKM website.
14. Mujanah, S., Brahmasari, I. A., Brahma Ratih, I., & Candraningrat, C. (2019). The impact of collective ambition, organizational culture, and organizational commitment on organizational citizenship behavior and the women’s cooperatives’ performance in East Java, Indonesia. International Journal of Civil Engineering and Technology, 10(08), 30-44.
15. Mursyidin, M., Dedy, D., & Riki, Y. (2023). The role of a women’s cooperative to improve the welfare of women coffee farmers in Bener Meriah Regency, Indonesia. Journal of Madani Society, 2(3), 195-202.
16. Mursyidin, M., Darmansyah, D., Yulianda, R., Fauzi, F., Asra, S., & Alwi, A. (2023). Government policy on Gayo Women’s Coffee Cooperative community in Bener Meriah Regency, Aceh Province, Indonesia. Journal of Madani Society, 2(2), 108-115.
17. Murdiono, A., Zen, F., & Istanti, L. N. (2024). Assistance in the development of business diversification to optimize income for women’s cooperatives in Blitar District. Journal of Sustainable Community Service.
18. Murdiono, A., Mukhlis, I., & Zagladi, A. N. (2023). Working capital management model in women’s cooperatives. Journal of Management, Accounting, General Finance and International Economic Issues (Marginal), 176-181.
19. Mutiarni, R. (2022). The importance of organizational skills to manage women’s cooperatives. KnE Social Sciences, 5th International Conference on Education and Social Science Research, 370-381.
20. Nurliana, N., Ramli, A., & Manda, D. (2022). Peran perempuan pedagang dalam meningkatkan kesejahteraan ekonomi keluarga di Desa Bua Kecamatan Tellulimpoe Kabupaten Sinjai. Phinisi Integration Review, 5(2), 345-354.
21. Program Keluarga Harapan (PKH). (2023). Ministry of Social Affairs, Republic of Indonesia. Retrieved from PKH official website.
22. Rodrigo, G. (2021). Gender equality and women’s empowerment: The co-operative approach. 15-37.
23. Setyaka, V. (2021). Indonesian New Cooperative Movement (IN Coop-Me) to achieve gender equality and social inclusion (GESI) in Indonesia. International Conference on Gender, Culture, and Society (ICGCS), 2-9.
24. Sherlock, S. J. (2020). Alliances of instrumental advantage: Supporting women’s agency in civil society organisations in Indonesia. Politics and Governance, 8(4), 147-156.
25. Siswanto, I., Budiman, F., Aini, F., & Kurniawan, F. (2024). Cooperatives amid the wave of Industrial Revolution 4.0: Opportunities and challenges. Indonesian Journal of Islamic Economics and Finance, 4(1), 223-238.
26. Syamsu, N. B. (2023). Peran koperasi sebagai lembaga pemberdayaan dalam meningkatkan taraf hidup masyarakat. Jurnal Sosial dan Teknologi (SOSTECH), 3(6), 461–468. https://doi.org/10.59188/jurnalsostech.v3i6.788
27. Suseno, G. P., & Nataliningsih, N. (2023). The role of women’s cooperatives as an institution to empower women in supporting the achievement of the SDGs. International Journal of Ethno-Sciences and Education Research.
28. Walker, A., & Verveer, M. (2017). How cooperatives help ensure Indonesian women don’t get left behind. The Jakarta Post.
29. Wijers, G. D. (2019). Inequality regimes in Indonesian dairy cooperatives: Understanding institutional barriers to gender equality. Agriculture and Human Values, 36(2), 167-181.
30. Widiyanti, E., Pudjihardjo, P. M. A. S., & Saputra, P. M. A. (2018). Tackling poverty through women empowerment: The role of social capital in Indonesian women’s cooperative. Jurnal Ekonomi dan Studi Pembangunan, 10(1), 44-55.
31. Village Fund Program. (2023). Ministry of Villages, Development of Disadvantaged Regions, and Transmigration, Republic of Indonesia. Retrieved from Village Fund Program website.
32. Yusuf, H., Fahrudin, A., & Fahrudin, F. I. (2024). Inequality and cultural obstacles of women empowerment: The case of Indonesia. The Palgrave Handbook of Global Social Problems, 1-13.