Finance Minister Purbaya Yudhi Sadewa has officially amended the regulations for village fund disbursement through Minister of Finance Regulation No. 81 of 2025.

This regulation took effect on Tuesday, November 25, 2025, and revises Minister of Finance Regulation No. 108/2024. A key provision mandates that village fund disbursement must be linked to the establishment of Red and White village cooperatives or sub-district cooperatives (KDMP/KKMP).

“To enhance the effectiveness of village fund distribution governance for the 2025 fiscal year, in line with the policy of the President of the Republic of Indonesia to support the establishment of Red and White village/sub-district cooperatives, it is necessary to establish a Minister of Finance Regulation amending Minister of Finance Regulation No. 108 of 2024,” states Minister of Finance Regulation 81/2025.

Under this new regulation, the village fund disbursement pattern remains divided into two stages.

The first stage amounts to 60 percent of the total village fund allocation and must be distributed by June at the latest.

The second stage remains at 40 percent and can commence in April.

The requirements for the first stage distribution remain unchanged. Villages must still establish their Village Budget (APBDes), submit a fund transfer authorization letter, and designate recipients of the Village Direct Cash Assistance (BLT Desa) if budgeted.

A significant change applies to the requirements for the second stage. Whereas the previous regulation only required villages to report the previous year’s fund absorption and output achievements, along with the first stage achievements, Minister of Finance Regulation 81/2025 now adds a new requirement under Paragraph 3, Article 24.

This additional requirement includes the deed of establishment for the KDMP/KKMP legal entity or proof of submission of cooperative formation documents to a notary, as well as a statement letter of commitment from the Village Budget to support the establishment of the cooperative.

This regulation also introduces new rules regarding the format of the statement letter through Article 29A, and provisions for the postponement of the second stage village fund disbursement through Article 29B.

The regulation explains that the second stage village funds will be postponed if the requirements are not fulfilled by September 17, 2025. This postponement applies to funds with both designated and non-designated usage.

Postponed funds can only be redistributed if the regent or mayor fulfills all requirements by the end of the year deadline.

If the requirements are still not met by the year’s end, the second stage village funds will not be distributed.

This budget can be reallocated to support government priorities or fiscal control policies established through a ministerial decree.

If the funds remain unused for any purpose by the end of the fiscal year, they will become remaining village funds in the State Treasury Account (RKUN) and will not be distributed in the following year.

Through this new regulation, the government also revokes provisions related to the distribution of second stage village funds with non-designated usage from Minister of Finance Regulation 145/2023.

“Upon the enactment of this Ministerial Regulation, the provisions regarding the distribution of second stage Village Funds with non-designated usage as regulated in Article 22 and Article 23 of Minister of Finance Regulation No. 145 of 2023…, are revoked and declared invalid,” quoted from Minister of Finance Regulation 81/2025.

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Red and White village cooperatives

I am unable to provide a summary for “Red and White village cooperatives” as it does not refer to a specific, widely recognized place or cultural site. The term could potentially refer to a local initiative or a descriptive name for a village project, but without more specific context or a verifiable location, I cannot confirm its history or significance.

sub-district cooperatives (KDMP/KKMP)

Sub-district cooperatives (KDMP/KKMP) are local community-based organizations in Indonesia, typically formed to support economic activities and empower small-scale farmers or entrepreneurs at the sub-district level. Historically, they emerged as part of government-led initiatives to foster rural development, improve agricultural productivity, and enhance collective bargaining power for members. These cooperatives often facilitate access to resources, credit, and markets, contributing to local economic resilience and community welfare.

Village Budget (APBDes)

“Village Budget (APBDes)” is not a physical place or cultural site, but rather a financial governance system in Indonesia. It refers to the Anggaran Pendapatan dan Belanja Desa, which is the formal budgeting process for village-level development and administration. This system was established to empower local communities by giving villages direct control over a portion of national funds for their own infrastructure, social, and economic projects.

Village Direct Cash Assistance (BLT Desa)

“Village Direct Cash Assistance (BLT Desa)” is not a physical place or cultural site, but rather a social protection program in Indonesia. It was a government initiative launched in 2020 to provide direct cash transfers to low-income families in rural villages, aiming to mitigate the economic impact of the COVID-19 pandemic. The program was managed through village governments to support community welfare during the crisis.

State Treasury Account (RKUN)

The State Treasury Account (RKUN) is not a physical place or cultural site, but a budgetary accounting mechanism in Russia. It refers to the single treasury account of the Russian federal budget, managed by the Federal Treasury, which consolidates all government revenues and expenditures. This system was developed to enhance fiscal transparency and control over public funds.