JAKARTA, RAKYAT NEWS – Economists are urging President Prabowo Subianto to exercise caution in implementing his new policy to forgive non-performing loans for micro, small, and medium enterprises (MSMEs) within agriculture, plantation, livestock, fishery, and maritime sectors. The policy, grounded in Government Regulation No. 47 of 2024, was enacted by Prabowo on Tuesday, November 5.

 

Wijayanto Samirin, an economist from Paramadina University, expressed concerns over the potential for high moral hazard. He suggested that the government consider alternative options, such as launching new subsidized loan schemes for fishers, to have a more substantial impact on the economy. According to Wijayanto, a government-backed fund of Rp 10 trillion could support loans totaling more than Rp 100 trillion, thereby creating a far-reaching economic benefit.

 

“This Rp 10 trillion funding should ideally come from the state budget rather than relying on state-owned or private banks,” Wijayanto said

 

Rully Arya Wisnubroto, a senior economist at Mirae Asset Sekuritas Indonesia, emphasized that any debt relief program for farmers must be backed by clear legal protections. Over the years, state-owned banks have faced challenges in canceling debts due to fears of being seen as financially detrimental to the state. Rully stated that if the debt cancellation framework is formalized, banks could resume lending to farmers whose debts have been cleared.

 

From a broader perspective, Toto Pranoto, a state-owned enterprise analyst from the University of Indonesia, believes that debt forgiveness for the People’s Business Credit (KUR) program could accelerate food self-sufficiency. With their debts erased, farmers, fishers, and livestock owners would be able to apply for new loans and quickly reinvest in their businesses. He also recommended that state-owned banks should set aside reserves to handle these debt cancellations.