IBRA to sell all SME debts before year-end
A'an Suryana, The Jakarta Post, Jakarta
The Indonesian Bank Restructuring Agency (IBRA) will auction off the remaining nonperforming loans (NPLs) owed by small and medium enterprises (SMEs) before the end of this year, an agency official said.
The official, who declined to be named, said that some 39,000 loan accounts worth Rp 3.5 trillion would be put up for sale.
"The timetable is not yet clear, but it will be before the end of this year," he said.
IBRA took over a huge amount of NPLs from ailing banks at the height of the late 1990s financial crisis. The NPLs include those owed by SMEs, comprising some 172,000 debt accounts worth around Rp 10.1 trillion.
The agency has a mandate to restructure the loans and sell them back to the banking sector. In the case of NPLs owed by the SMEs, IBRA has been selling the loans since 2000. Loan assets have been sold to ANZ Panin Bank, Bank Danamon and Bank Arthagraha at a huge discount.
The SMEs will now have to repay the loans to the three institutions.
The government has recently issued a decree stipulating that the SMEs are entitled to a 25 percent debt discount if they make a one-time cash settlement.
The government defines SME loans as loans with an individual size of less than Rp 5 billion, meaning that consumption loans or credit card loans owed by individuals also fall under this definition.
But IBRA spokesman Raymond van Beekum said that credit card loans or consumption loans categories would not be eligible for the debt haircut facility.
In total there are some Rp 39 trillion worth of NPLs including those owed to IBRA and banks.
Separately, a source at the agency said that SMEs could still make repayments via IBRA before their debts were sold to investors.
He said that the agency would accept registration for debt repayment until Jan. 29, next year.
If the debtors are unable to make repayments by the above deadline, the loans will be sold to other financial institutions through public auction, the source said.