P2SK Law Paves the Way for MSME Debt Write-offs

The Financial Sector Development and Strengthening Law (P2SK) is expected to become a solution for thousands of micro, small, and medium enterprise (MSME) operators who have been hampered by difficult-to-resolve debt burdens. The Chairman of the Working Committee for the P2SK Amendment Bill, Mohamad Hekal, explained that one of the key substances agreed upon in the revision of the P2SK Law is an effort to provide a second chance for MSME operators to re-participate in economic activity.

He noted that many business operators still struggle to develop their ventures because they remain burdened by old credit obligations that cannot be administratively resolved. This condition not only hampers business productivity but also has the potential to cause greater losses to the economy.

“One of the things we can be proud of in this law revision is the write-off and cancellation of MSME bad debts that have been very troublesome,” said Hekal, as quoted from a written statement on Thursday (4/6).

He explained that through a clearer legal basis, the government will have room to resolve various credit issues that have been hampering MSME operators. Consequently, affected citizens can regain access to financing and other economic activities.

“With this law, a legal basis is provided so that we can carry out write-offs so that people affected by this problem can return to participating in Indonesia’s economic growth,” he stated.

Hekal assessed that siding with MSMEs is an important part of the effort to maintain national economic resilience. The MSME sector has long been the backbone of the Indonesian economy as well as the largest absorber of labour. Therefore, he hopes the P2SK Law will not only strengthen the national financial sector but also deliver benefits felt directly by the public, particularly small business operators who need support to rise and thrive.