Govt to issue decree on SMEs's bad debts

Govt to issue decree on SMEs's bad debts

Antara, Jakarta

The government will issue a presidential decree on the restructurization of bad debts owed by small and medium enterprises (SMEs) by the end of June or early July, Coordinating Minister for Economic Affairs Dorodjatun Kuntjoro Jakti said here on Tuesday.

"The government wants to settle the issue as soon as possible," Dorodjatun said after a cabinet session on SMEs led by Vice President Hamzah Haz.

Dorodjatun said, of the total SMEs' bad debts of Rp 28.1 trillion (about US$3.2 billion), Rp 10.2 trillion was owed to state-run banks, Rp 4.8 trillion to private banks, Rp 3.1 trillion to the Indonesian Bank Restructuring Agency (IBRA), and Rp 10 trillion to the Directorate General for State Auctions and Debts Affairs.

The issue of SMEs' bad debts is expected to be finalized before 2004, the minister said, adding that Central Bank Governor Syahril Sabirin and Coordinating Minister for People's Welfare Yusuf Kalla had signed an agreement to set aside Rp 30 trillion in funds to help SMEs.

Meanwhile, Minister of Cooperatives and Small and Medium Enterprises Alimarwan Hanan said the presidential decree would regulate the restructuring of the bad debts.

SMEs included in the restructurization program would be cooperative debtors who were willing to settle their debts in good faith, debtors with bright business prospects but who were unable to repay the debts due to the economic crisis, and debtors with maximum bad loans of Rp 5 billion.

The debt restructurization program would also involve IBRA, Alimarwan said.