Mega to sign decree on SME this week<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
President Megawati Soekarnoputri has endorsed the latest decree
\non the restructuring of debts owed by small and medium-sized
\nenterprises (SMEs), and is set to sign it on Thursday, a senior
\ngovernment official says.<\/p>\n
\"The President agrees with the latest draft. The decree will
\ntake immediate effect once it has been signed,\" Taufik, a deputy
\nat the Office of the State Minister of SMEs and Cooperatives,
\ntold participants at an SME seminar here on Tuesday.<\/p>\n
He said that the latest draft of the presidential decree was
\nthe 25th version.<\/p>\n
The government has been trying to come up with a restructuring
\nplan for the debts owed by the SMEs for the past six months.
\nInitially, the above ministry, with strong backing from Vice
\nPresident Hamzah Haz, proposed a significant haircut facility and
\nsoft restructuring terms for the SMEs.<\/p>\n
But this has been protested by banks who argue that such a
\npolicy could do further harm to their already shaky financial
\npositions and would be unfair to other SMEs which have been good
\nin repaying their debts.<\/p>\n
These conflicting interests and intense lobbying by the banks
\nhas forced the government to revise the presidential decree many
\ntimes.<\/p>\n
The amount of debt owed by the SMEs totals around Rp 39
\ntrillion (US$4.31 billion) including those owed to banks already
\ntaken over by the Indonesian Bank Restructuring Agency (IBRA).<\/p>\n
Restructuring these debts is crucial to allow banks to resume
\nlending to the SMEs.<\/p>\n
The new version of the presidential decree does no longer
\nspecify the size of debt haircut facility for the SMEs. Under
\nthe previous versions, the haircut was set at 30-50 percent.
\nBanks have protested such a facility.<\/p>\n
Some analysts have said that the new version of the decree,
\nreflects the triumphant of banks in lobbying the government
\nparticularly via the Office of the Coordinating Minister for the
\nEconomy.<\/p>\n
\"We hope that the debt problem could be resolved soon, so that
\nthe SMEs could start generating productive activities, in a bid
\nto spur economic growth,\" said Taufik.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mega-to-sign-decree-on-sme-this-week-1447893297",
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"sponsor": "Okusi Associates",
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