President Jokowi Chairs Meeting on MSMEs Credit Restructuration

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 17 Juli 2023
Category: News
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Coordinating Minister for Economic Affairs Airlangga Hartarto makes a press statement after the meeting on MSMEs credit restructuration, on Monday (07/17), in Jakarta. (Photo by: Cabinet PR of Secretariat / Agung)

President Joko “Jokowi” Widodo chaired a meeting on credit restructuration for micro, small, medium enterprises (MSMEs), at the State Palace, Jakarta, on Monday (07/17). Coordinating Minister for Economic Affairs Airlangga Hartarto stated that the meeting discussed a plan of exempting MSMEs having non-performing loan from paying credits to banks.

“We have discussed credit restructuration of MSMEs, including exemption for MSMEs with non-performing loan,” Airlangga mentioned after the meeting.

Airlangga further mentioned that a number of regulations that support the exemption plan have been set out, among others, Law Number 10 of 1998 on Banking Industry, Regulation of Bank Indonesia Number 14/15/PBI/2012 on Assessment of General Bank Assets, and Regulation of the Financial Services Authority Number 40/POJK.03/2019 on Assessment of General Bank Assets Quality.

“On the regulations, all related laws have been set out,” he said.

In addition, the Coordinating Minister explained that Law Number 4 of 2023 on Financial Sector Development and Strengthening, especially in Articles 250 and 251, includes terms on the exemption for MSMEs with non-performing loan from paying credits to banks and non-bank financial institutions in order to support funding access for MSMEs.

“The exemption can be done to the MSMEs with terms and conditions, namely restructuration of non-performing loan, after that, if they fail to pay, then exemption can be done,” he explained.

However, Airlangga added that a number of adjustments should be done, especially in the aspect of MSMEs.

“Based on Government Regulation Number 13 of 2000, the exemption is imposed not more than Rp350 million because we understand that people’s business credit has reached Rp500 million, so we ask to raise the credit limit,” he added.

Related to adjustment for conditions of credit limit to do the exemption of non-performing loan, Airlangga said that the Government will immediately lay down the criteria set out in derivative regulation of Law on Financial Sector Development and Strengthening.

“We will discuss it in the next one or two weeks, the derivative regulation of Law on Financial Sector Development and Strengthening will be set out,” he remarked.

Based on the MSMEs credit collectability data released by the state-owned banks per 31 December 2022, the number of debtors categorized in collectability 2, considered under supervision, reached 912,259. Meanwhile, those that are categorized in collectability 5, considered non-performing loan, are as many as 246,324. (DND/UN)(AW/MUR)

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