Too crowded to grow? Luminosity-based evidence on village cooperative finance in Indonesia
Bibliographic Data
| ID | 21515657 |
|---|---|
| Authors | Al Bahits Annef (0009-0001-2584-6120, Nagoya University Graduate School of International Development), Rusli Abdulah (0000-0002-9249-0160, Nagoya University Graduate School of International Development), Bangkit A A Wiryawan (0000-0001-7840-6914, Diponegoro University Faculty of Social and Political Sciences) |
| Year | 2026 |
| Pages | 1-17 |
| Publication date | 2026-07-09 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | International Journal of Social Economics (JOURNAL) |
| Journal identifiers | ISSN: 0306-8293 • E-ISSN: 1758-6712 |
| Publisher | Emerald (PUBLISHER) |
| DOI | 10.1108/ijse-11-2025-1107 |
| OpenAlex | W7167708641 |
| Language | EN |
| References cited | 36 |
Purpose This article examines the relationship between cooperative-based microfinance institutions and village-level economic activity in Indonesia. Specifically, it seeks to assess the differential effectiveness of Village Cooperative Units (KUD) against Savings and Loans Cooperatives (Kospin) in supporting the village-level economy. Design/methodology/approach The article utilizes village-level data combined with luminosity-based GDP estimates constructed from calibrated nighttime light (NTL) data. It applies quasi-experimental methods to analyze and compare the performance of the KUD and Kospin cooperative models. Findings The results indicate that villages with Kospin cooperatives are consistently associated with higher levels of local economic activity, while villages with KUDs operating in isolation show no statistically significant differences. However, villages where KUDs coexist with formal banks exhibit more favorable economic outcomes. At the same time, the simultaneous presence of KUDs, Kospin and banks is associated with weaker marginal economic differences, suggesting potential overcrowded. Research limitations/implications The findings fundamentally challenge the viability of “one-size-fits-all” policies, implying that the interaction between different financial institutions suggests overcrowding risk, significantly alters economic outcomes. Practical implications In light of Indonesia's new “Koperasi Merah Putih” flagship initiative, the results call for a flexible, context-sensitive cooperative ecosystem. Originality/value This article provides a novel evaluation of cooperative models using luminosity-based GDP estimates constructed from calibrated NTL data. It offers a policy blueprint for advancing inclusive finance not only in Indonesia but across developing regions in Asia by highlighting the nuances of institutional complementarity
Blueprint · Financial inclusion · Loan · Microfinance · Overcrowding · Housing, Finance, and Neoliberalism · Local Economic Development and Planning · Microfinance and Financial Inclusion
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| Highly cited | No |
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