Small and medium firms want debt rescheduling

JAKARTA (JP): A group of small and medium-scale businesses under the Reformed Entrepreneurs Forum (FPR) has agreed to form a committee to resolve their unpaid matured debts to domestic banks.

The forum's chairman, Naldy Nazar, said Saturday the group would meet with Bank Indonesia Governor Sjahril Sabirin next week to discuss the possibility of rescheduling their debts, Antara reported.

Naldy said the committee consisted of representatives from eight business organizations.

The eight organizations are the Indonesian Builders Association, the Indonesian Sugarcane Association, the Federation of Indonesian Clove Cigarette Manufacturers Association, the Association of Indonesian Wood Panel Producers, the Indonesian Cement Association, the Indonesian Employers Association, the Indonesian Furniture and Handicraft Industries Association and the Indonesian Association of Small and Medium Enterprises.

The committee will ask their banks to reschedule their debt repayments so that they can maintain their businesses during the current economic hardship, he said.

It will ask local banks for a grace period of five to eight years, he said.

The rescheduling of debt repayments was crucial because many business activities in the country had ground to a halt since the monetary crisis started last year, he said.

Naldy urged the government to help resolve the problem of domestic debts, as they were of no less importance than foreign debts.

The entrepreneurs were having problems getting the money to repay their rupiah-denominated debts, he said.

"Many companies have sacrificed their working capital to repay debts. If that's the case, it's only a matter of time before they go bankrupt," he said.

Naldy said the government's treatment of both types of debts must be equal, especially since most companies which have domestic debts are small and medium enterprises.

The rescheduling of domestic debts would help revive the people's economy on the lower level, he said.

He also urged the Indonesian Chambers of Commerce and Industry (Kadin) to help small and medium entrepreneurs to resolve their debt problems.

"Kadin must not only attend to the dollar-denominated debts of big companies and forget smaller ones like us," Naldy said.

The chamber's chairman, Aburizal Bakrie, has said the chamber will ask for the rescheduling of the private sector's dollar- denominated debts which totals US$32 billion. (das)