Jakarta, Oct. 27 -- State-owned lenders under the Himbara group will remain selective in financing the Merah Putih Village and Urban Cooperatives (Kopdes/Kel) program, despite a government guarantee backed by village funds, according to financial analyst M. Rizal Taufikurahman.

"The government guarantee acts more as a confidence trigger than a determinant of success," said Rizal, head of the Center for Macroeconomics and Finance at Indef, in Jakarta on Friday.

He said the main hurdles are the cooperatives' lack of business track records, weak financial governance, and limited cash flow discipline. As long as details on the first-loss guarantee-such as risk bearers, coverage limits, and claim processing-remain unclear, banks will stay ca...