After an investigation by the Indonesian police, the archbishop of Pontianak released a statement explaining the legality of the Church's microcredit activities. The issue arose following a legal battle between one of the cooperatives and a government-owned bank.
Jakarta (AsiaNews) – Archbishop Agustinus Agus of Pontianak issued a statement defending West Kalimantan credit unions after Indonesian police launched an inquiry into their operations.
Police visited Gabriel Marto, head of the credit union in Pancur Kasih, accusing him of carrying out illegal financial practices, including life insurance fraud and suspicious bank transfers.
“All these accusations are baseless," Marto told the media. "We have extended financial help to people in remote areas where there are no financial offices, but we have not violated the law.”
The Catholic Church started its own microcredit business several decades ago, Archbishop Agus explained, and has helped hundreds of thousands of people over the years.
The three largest credit unions today can be found in Keling Kumang, Pancur Kasih, and Lantang Tipo.
In West Kalimantan, at first it was only Dayak natives who received financial aid; now members come from all of the country’s religious communities.
In his statement, the archbishop stressed that “the Catholic Church in West Kalimantan province set up this social economic initiative for compassion reasons to promote economic well-being among the marginalised, as endorsed by the Church’s social doctrine.”
For the prelate, “as a group of faithful we are not perfect in many things, but the presence of several credit unions has benefitted small businesses, helping them stay open even during the pandemic.”
Following the statement, backed by Catholic parties, tensions in Kalimantan subsided.
According to some local residents however, the Indonesian police investigation in Pancur Kasih was ordered following a court case involving a government-owned bank, Bank Tabungan Negara (BTN), and the Lantang Tipo Credit Union.
The latter had invested 70 million Indonesian rupiahs (US$ 5,000) in the BTN. After transferring 40 million rupees (US$ 2,850) to another private bank, the credit union wanted to transfer the remaining 30 million (US$ 2,150) as well. By then however, half of the money had disappeared.
A lawsuit was then filed to get the missing money back, but the Supreme Court defended the BTN and its employees, so the government bank never compensated the credit union for its loss.
“Despite the absence of clear evidence, I am personally convinced that the investigation into the administration of Pancur Kasih was due to the legal battle involving Lantang Tipo", said Fr Floris.
The clergyman, who runs the credit union, hopes that the government will intervene to resolve the issue. “If it didn't, we would also lose out in terms of image. People would feel mistrust towards us and it would be a disaster in West Kalimantan.”