Govt revises SME debt restructuring plan<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government said it had revised a debt restructuring plan
\nfor small and medium enterprises (SMEs), combining debt reduction
\nand refinancing offers under one scheme to recoup some Rp 39
\ntrillion (about US$3.9 billion) from small debtors.<\/p>\n
State Minister of Cooperatives and Small and Medium
\nEnterprises Alimarwan Hanan said on Thursday the government
\ncleared the main barrier for a debt restructuring scheme for
\nSMEs, with its decision to combine two approaches.<\/p>\n
"The SMEs debt restructuring policy is still on, but it will
\nbe packaged with a refinancing scheme," he announced after
\nmeeting Vice President Hamzah Haz.<\/p>\n
The government wants to have an SMEs debt restructuring scheme
\nout this month, but disagreement over the approach stalled the
\nprocess.<\/p>\n
Under Alimarwan's original scheme, debtors were to be offered
\na 50 percent discount for a one-time cash settlement, and 40
\npercent if they paid up within one year.<\/p>\n
Hamzah was against the debt reduction offer, favoring instead
\nto reschedule the debts and if necessary refinance selected SMEs.<\/p>\n
His concern was reportedly shared by the International
\nMonetary Fund (IMF), which questioned the impact of mass debt
\nwrite-offs on the state budget.<\/p>\n
Details of the revised plan have yet to be revealed, and
\nwhether or not it would pass as a government policy depends on
\nthe Cabinet's approval.<\/p>\n
The government has registered more than 414,000 small debtors,
\nbut not all are believed to be SMEs. Debtors with individual
\ndebts of up to Rp 5 billion fall under the government's SMEs
\ncategory, meaning that they include consumer credit loans, credit
\ncard loans or loans owed by businesses linked to large groups.<\/p>\n
Of the Rp 39 trillion owed by SMEs, most has been taken over
\nby the Indonesian Bank Restructuring Agency (IBRA), which sells
\nthe loans at discounted prices.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-revises-sme-debt-restructuring-plan-1447893297",
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"sponsor": "Okusi Associates",
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