On Tuesday, March 14, 2023, the UGM Faculty of Law, together with Kejati DIY, visited Sidorejo Village, Kulon Progo, to conduct a Datun Suluh Praja Legal Outreach session. This edition's topics were Loan Sharks (Bank Plecit) and Village-Owned Enterprises (Badan Usaha Milik Desa/BUMDes).
The topic of loan sharks (Bank Plecit) was presented by Dr. Hariyanto, S.H., M.Kn., a lecturer in the Department of Business Law at FH UGM. He explained that, in essence, the way to prevent public dependency on loan sharks is through the establishment of Microfinance Institutions (Lembaga Keuangan Mikro/LKM). LKM operations cannot be separated from the supervision of the Financial Services Authority (Otoritas Jasa Keuangan/OJK) -- this is a statutory requirement. Existing LKM must obtain proper licensing from OJK to operate, ensuring their legality. Going forward, district governments are obligated to conduct routine monitoring of LKM financial reports in accordance with OJK regulations -- ensuring that village business activities continue safely, free of ongoing concerns, given that properly licensed LKM are operating in the village.
This was followed by the second topic, Village-Owned Enterprises (BUMDes), presented by Ardianto Budi Rahmawan, S.H., LL.M., a lecturer in the Department of State Administrative Law. As an introduction, he explained the definition of a BUMDes -- a legal entity established by a village for the maximum benefit of the village community. The establishment of a BUMDes must be carried out through a village regulation, with key elements including its articles of association and initial capital. The legal basis for BUMDes lies in the Government Regulation on BUMDes and the Kulon Progo Regent's Regulation on BUMDes Management. Ardianto Budi also covered the various stages of establishment, organizational structure, and capitalization.
The session continued with a presentation from Kejati DIY on the Authority and Duties of the State Attorney of the Republic of Indonesia in Civil and State Administrative Affairs. During the discussion session, participants raised numerous questions, particularly regarding matters affecting their village - including transactions involving loan sharks, which remain common in local markets, and the legal force of stamped documents (materai).
