Jakarta. President Prabowo Subianto officially signed a regulation to write off approximately Rp 10 trillion ($634.3 million) in bad debts owed by farmers, fishermen, and operators of micro, small, and medium enterprises (MSMEs) that have accumulated since the 1998 and 2008 financial crises.

"After listening to the suggestions and aspirations of many parties, especially from farmer and fisher groups across Indonesia, today I will sign Regulation No. 47 of 2024 regarding the elimination of bad debts for MSMEs in the agriculture, plantation, livestock, fisheries, and marine sectors, as well as other MSMEs," Prabowo said at the Merdeka Palace in Jakarta.

With this regulation, Prabowo hopes to assist MSMEs, food producers, and fishermen burdened by debt in continuing their businesses. These debts have hindered their ability to secure loans from banks, forcing them to seek riskier loans from alternative sources, such as loan sharks.

"We hope that all farmers, fishermen, and MSMEs across Indonesia can work with peace, spirit, and confidence that the people of Indonesia respect and appreciate food producers who are vital to the life of the nation," Prabowo added.

The signing of this regulation was enthusiastically welcomed by MSME stakeholders, as well as farmer and fisher associations.

"We hope that any burdens farmers face can be alleviated; this represents support. I believe this will be an extraordinary new and progressive step. Although the specific ceiling has not yet been discussed, we hope farmers can breathe easier, as can fishermen," said Arif Zamroni, Chairman of the Cocoa Farmers Association, at the Presidential Palace in Jakarta on Tuesday evening.

Arif believes this regulation marks a significant step by the Prabowo administration that will positively impact farmers, fishermen, and MSME actors burdened by debt.

"Many of us still have unresolved debts and other burdens, making it difficult for us to move forward more progressively. This regulation is an extraordinary solution, and we hope its implementation in the field meets the public's expectations," Arif expressed.

Gulat Manurung, Chairman of the Indonesian Palm Oil Farmers Association, views the signing of this regulation as a strategic move by the government to support national food security.

"Debt becomes a burden that makes it difficult for farmers to progress and improve productivity. We in the palm oil sector see this as the government's way to maintain food security. As President Prabowo targets 8 percent economic growth, it all begins with the economic stability of farmers and fishermen," Gulat said.

According to SME Minister Maman Abdurrahman, the government is estimated to eliminate debts owed to banks by more than 1 million MSME actors, totaling around Rp 10 trillion. This initiative aims to reopen banking access for farmers, fishermen, and SME operators who have been unable to secure new loans due to outstanding debts, many of which date back to the financial crises of 1998 and 2008.

"On average, these businesses owe a maximum of Rp 500 million, while individuals may owe up to Rp 300 million," Minister Maman explained at the Presidential Palace in Jakarta following the signing ceremony.

"This is already registered for write-off in each respective bank. Our aim is to restore these 1 million MSME actors so they can regain their footing and reapply for loans to continue their businesses moving forward," he added.