JAKARTA — President Prabowo Subianto has taken a strategic step to write off the debts of 6 million MSMEs, including farmers and fishermen, through a Presidential Regulation (Perpres) that will be issued.
This policy aims to increase people’s purchasing power and open up investment opportunities in developing small businesses.
By eliminating the bank’s right to collect debts from borrowers whose debts have been written off, the national leader born in 1951 is trying to ease the financial burden on MSMEs in order to provide space for innovation and business expansion.
Permata Bank Chief Economist, Josua Pardede, appreciated the Head of State’s plan which was considered capable of boosting purchasing power and providing additional capital for MSMEs.
According to Josua, the debt cancellation policy can create looser liquidity for MSMEs and labor-intensive sectors, such as agriculture and fisheries.
“This can increase their purchasing power and provide additional capital for investment or business development,” he said.
“MSMEs that benefit from debt relief can be more confident in running their businesses and have the potential to grow their businesses,” added Josua.
On the other hand, BCA Chief Economist, David Sumual, sees the initiative of the eighth President of the Republic of Indonesia as a positive step for the long-term economy.
According to him, debt amnesty needs to be carried out periodically so that economic growth is not hampered, especially for those on the banking blacklist.
“This amnesty provides an opportunity for individuals and corporations to access credit again and contribute to the national economy,” said David.
Businessman Hashim Djojohadikusumo, the younger brother of President Prabowo, said the debt amnesty policy would soon be signed by the nation’s leader who is also a retired high-ranking Indonesian military officer.
“Maybe next week, Mr. Prabowo will press a presidential decree for amnesty. All of the debts have been written off long ago and replaced by banking insurance, but the right to collect from the bank has not been removed,” he explained.
This policy was taken because many MSMEs, including fishermen and farmers, still have difficulty accessing credit due to problems with the Financial Information Services System (SLIK) of the Financial Services Authority (OJK).
President Prabowo’s steps are expected to restore purchasing power and reduce people’s dependence on high-interest loans, such as loan sharks and online loans.