Gov’t Unveils Criteria for MSMEs Eligible for Debt Write-Off

JAKARTA, investortrust.id – The Minister of Micro, Small, and Medium Enterprises Maman Abdurrahman, has outlined the criteria for MSMEs eligible for debt write-offs under a policy initiated by President Prabowo Subianto’s administration. The initiative, part of the government’s affirmative action, aims to ease financial burdens and provide relief to struggling entrepreneurs. 

Minister Maman highlighted the program’s benefits while cautioning against potential moral hazards. He urged MSME entrepreneurs to maintain financial discipline and avoid reliance on similar measures in the future.

“Approximately one million MSME borrowers listed in the debt write-off records of Himbara Banks will receive debt relief,” Maman stated in a written announcement from Jakarta on Thursday, January 9, 2025.

Himbara Banks—a group of state-owned banks comprising Bank Mandiri, Bank Negara Indonesia (BNI), Bank Rakyat Indonesia (BRI), and Bank Tabungan Negara (BTN)—manage many of Indonesia’s government-supported financial programs, including MSME financing.

The minister explained that eligibility for the program is governed by Government Regulation No. 47 of 2024 on Bad Debt Write-Offs for MSMEs. He detailed three key criteria:

• Maximum Debt Amount: MSMEs with debts up to Rp 500 million are eligible for write-offs.

• Debt Record Duration: Borrowers must have been listed in Himbara Bank’s debt write-off records for at least five years before the regulation’s enactment.

• Inability to Repay: Eligible borrowers must demonstrate that they cannot repay their debt and lack collateral.

Entrepreneurs who accessed People’s Business Credit (Kredit Usaha Rakyat or KUR) loans are excluded from this program. These loans, which are backed by the government to support small businesses, provide financing up to Rp 100 million without requiring collateral and charge a subsidized fixed interest rate of 6%. Any discrepancies in the program’s implementation can be reported directly to the Ministry of MSMEs. 

To ensure the program’s integrity, the Ministry of MSMEs is addressing irregularities and enhancing evaluation mechanisms. Minister Maman proposed an Innovative Credit Scoring (ICS) system to the Financial Services Authority (OJK). Unlike traditional assessments that rely on collateral, the ICS system evaluates MSME financing eligibility using alternative data sources such as electricity consumption, telecommunications activity, BPJS (national health insurance) membership, and e-commerce transactions.

“The ICS system will provide a more comprehensive evaluation of MSME entrepreneurs in the future,” Maman explained.

While the program is expected to benefit one million MSMEs, the minister emphasized the Ministry’s commitment to supporting those who do not qualify. Entrepreneurs excluded from the debt write-off program can still access financing options, such as KUR loans, to support their growth and development.