Jakarta — President Prabowo Subianto plans to cancel the debts of approximately 5-6 million farmers and fishers in Indonesia. This policy aims to alleviate the economic burden on citizens struggling to repay their loans. Hashim Djojohadikusumo, Deputy Chair of the Gerindra Party’s Advisory Council, explained that this debt forgiveness will be enacted through a Presidential Regulation (Perpres), which Prabowo is expected to sign soon.

“Possibly by next week, President Prabowo will sign the debt relief Perpres, prepared by Minister Supratman (Minister of Justice) in accordance with the law. This policy will allow 5-6 million individuals and their families to start anew, and they will regain the ability to borrow from banks without facing restrictions on their credit records in OJK’s Financial Information Service System (SLIK),” Hashim stated on Thursday (Oct. 24, 2024).

Prabowo’s decision follows a report from Hashim, who highlighted the challenges farmers and fishers face in securing loans due to unpaid debts. According to Hashim, many have turned to online lending platforms or loan sharks, exacerbating their financial strain.

“I told President Prabowo this needs to change, and he agreed. Bank officials were consulted by Minister Burhan. This move won’t harm Indonesia’s banking sector because the debts are long-standing and already accounted for. However, without this, millions are forced to rely on online loans and loan sharks,” Hashim explained.

Hashim added that this debt relief will not only protect farmers and fishers from exploitative lenders but also improve the welfare of an estimated 30-40 million people, including their family members. This move, he hopes, will restore their access to formal bank loans, free from the negative credit records in SLIK OJK.

“For years, 5-6 million have been unable to secure credit, so they end up with loan sharks or online lenders. I just learned about these online loans. As a conglomerate, I’ve never needed one, but we have to recognize the need here,” he continued.

This policy is part of the government’s poverty alleviation efforts, aimed at enabling farmers and fishers to resume their livelihoods without the looming burden of mounting debts. According to Hashim, much of the debt encumbering these farmers and fishers has accumulated over decades, dating back to the 1998 monetary crisis and subsequent years.

“Millions of our farmers and fishers are still weighed down by old debts — some from the 1998 crisis, some from 2008, and beyond. Around 5-6 million are unable to borrow from banks because every time they’re checked in the OJK SLIK, their old debts of Rp 10-15 million block them,” Hashim explained.

Through this debt forgiveness, the government hopes that farmers and fishers will achieve greater prosperity, utilize bank loans for productive purposes, and avoid the high-interest traps of online lenders and loan sharks. (A)

Source : CNBCIndonesia.com