Debt haircut facility for SMEs<\/p>\n
JAKARTA (JP): The Financial Sector Policy Committee (FSPC)
\ndecided on Tuesday to allow local banks to provide debt reduction
\nof up to 25 percent in the restructuring of debts owed by small
\nand medium-sized enterprises (SMEs).<\/p>\n
FSPC secretary Syafruddin Tumenggung said that the decision
\nwould help expedite the debt restructuring process of the SMEs.<\/p>\n
\"The FSPC has approved the proposal to provide a 25 percent
\nhaircut to (indebted) SMEs,\" Syafruddin told reporters following
\na late meeting of the committee.<\/p>\n
The FSPC oversees the country's corporate restructuring
\nprocess.<\/p>\n
Syafruddin said that SMEs under the Indonesian Bank
\nRestructuring Agency (IBRA) had previously enjoyed the haircut
\nfacility.<\/p>\n
IBRA received the debts from banks liquidated by the
\ngovernment in 1998 and 1999.<\/p>\n
The indebted SMEs include companies who separately owe less
\nthan Rp 5 billion (US$532 thousand).<\/p>\n
Critics have earlier claimed that there was no need to provide
\nthe haircut facility because many of the SMEs actually belong to
\nwealthy businessmen.<\/p>\n
But president of the giant state-owned Bank Mandiri, E.C.W.
\nNeloe, welcomed the FSPC decision.<\/p>\n
Neloe said that the debt haircut facility would help expedite
\nthe debt restructuring of some 10,000 indebted SMEs owing around
\nRp 1.5 trillion in bad debts.<\/p>\n
He was speaking to reporters following a meeting with the
\nFSPC.<\/p>\n
But Neloe said that, in addition to the debt haircut facility,
\nthe committee had also agreed to allow banks to annul the
\ninterest rate charged on the debts of SMEs.<\/p>\n
He said that this facility would encourage the SMEs to repay
\ntheir debts in cash. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/debt-haircut-facility-for-smes-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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