Toto further suggested that the government could provide refinancing options to these state-owned banks through equity participation. Such funding could help relieve the banks of any financial burdens associated with the policy.

President Prabowo hopes that the debt forgiveness program will boost production in the agricultural and fishery sectors, both of which are critical to Indonesia’s domestic food supply. By forgiving debts, Prabowo envisions farmers, fishers, and MSME owners working without financial stress and contributing more effectively to the nation’s food security.

“Our people respect and value these vital food producers, who play an essential role in sustaining our nation,” Prabowo said during a press statement at Merdeka Palace. He noted that many farmers and fishers have previously been barred from traditional bank loans due to outstanding debts. Without bank access, many resort to loan sharks or online lenders, further compounding their financial difficulties.

The Minister of Cooperatives and Small and Medium Enterprises, Maman Abdurrahman, stated that the program targets around one million farmers, fishers, and MSME operators with an estimated budget of Rp 10 trillion. The debt forgiveness covers loans up to Rp 500 million for businesses and Rp 300 million for individuals, specifically for those affected by the COVID-19 pandemic or natural disasters, such as earthquakes.

Maman clarified that the policy is intended only for borrowers who have faced insurmountable financial setbacks and have not been able to repay their debts for up to ten years. “This program is not a blanket forgiveness; it’s designed for those who genuinely cannot recover financially,” Maman noted at a press conference following the issuance of PP 47/2024. ( Uki Ruknuddin)

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