LPEI Proposes Additional PMN Of IDR 10 Trillion

Illustration. (Photo: Doc. Antara)

JAKARTA - The Indonesian Export Financing Agency (LPEI) proposed an additional IDR 10 trillion State Equity Participation (PMN) in 2024 to develop the capacity of the Special Export Assignment (PKE) program and create a new program needed by exporters.

"So the proposed PMN of IDR 10 trillion is to increase the capacity of five existing programs, namely trade finance for non-traditional areas, SMEs, transportation tools, the pharmaceutical industry, and medical devices and we also provide four new programs, namely the food industry, offshore financing, guarantees, and insurance," said LPEI Executive Director Riyani Tirtoso in a Hearing Meeting (RDP) with Commission XI DPR RI, quoted from Antara, Tuesday, July 2.

According to him, the total PMN PKE exercise of IDR 8.7 trillion has been allocated for all PKE programs, so special PMN additions are needed.

Based on the LPEI study, the addition of special PMN of IDR 10 trillion during the 2024-2028 period provided benefits with an Internal Rate of Return (IRR) value of 6.95 percent and a positive Net Present Value (NPV) of IDR 593 billion.

He considers the addition of PMN PKE is necessary because Indonesia must improve and improve product competitiveness abroad, exporters need low cost of production so that they can compete globally by utilizing the PKE interest rate, then the PKE program opens access especially for traditional countries, and not all banks commercially support strategic industries that are not yet stable.

LPEI is declared to have collected proposals from the ministry for the allocation of PMN PKE Rp10 trillion, starting from the Ministry of Trade and the Ministry of Foreign Affairs there are 14 priority products to five regions covering 113 countries, the Ministry of Industry and the Ministry of SOEs proposed strategic shipping, rail, manufacturing, pharmaceuticals and medical devices, as well as food processing.

Then also from the Ministry of Tourism and Creative Economy for the retail industry as well as restaurants and creative industries, and the Ministry of Finance for foreign exchange savings for food security programs.

"So we hope that PMN for PKE will provide benefits, create foreign exchange worth IDR 119 trillion for the period 2024-2028, where we calculate it using the National Developmental Impact formula compiled by IPB (Bogor Agricultural Institute)," said Riyani.

On this occasion, he conveyed various other reasons regarding why PMN for PKE of Rp. 10 trillion needed to be disbursed.

The first is that there are changes in the board of directors, starting from the replacement of the entire board of directors, executive directors, executive directors, and senior management, which is mostly from professional bankers. This means that there are no more administrators related to asset quality problems that occurred in the 2009-2018 period.

Second, there have been a change of employees at the head of the lower division level as many as 224 people from 2020 to June 2024 who were included in the Employment Termination (PHK) program, early retirement, and were asked to resign and be replaced with professional bankers from external.

Third, civil and criminal legal remedies have been carried out. As is known, two people from debtors, two LPEI directors, three division heads, and one department head have been sentenced to prison for the problem of credit cases. His party affirms support for law enforcement, including asking for accountability from parties related to the legal case.

Fourth, the completion of asset quality has been carried out by aggressively recovering by involving the state attorney - Deputy Attorney General for Civil State Administration (Jamdatun) in implementing non-litigation functions.

In addition, he continued, LPEI already has a problematic asset settlement strategy mapped into four clusters. Starting from the first cluster is the investor search strategy of 35 debtors with outstanding IDR 13.6 trillion, then the next cluster regarding collection and asset sales of 165 debtors with outstanding IDR 19.6 trillion, a maximum recovery strategy of 84 debtors with outstanding IDR 16.5 trillion and a focus on legal action against 15 debtors with outstanding IDR 6 trillion.

Changes in portfolios, infrastructure, decision-making mechanisms through committees on a 4 eye principle, monitoring, increased capability of human resources, and enforcement have been implemented since 2020 which has a positive impact on asset quality as reflected in the 0.00 percent Non Performing Loan (NPL) level.

Strategi ke depan, kami akan terus fokus untuk perubahan bisnis model yang tadi saya sampaikan, yaitu beyond financing. Kemudian memberikan developmental impact yang besar, dalam hal ini untuk UKM dan sektor industri, yang memberikan nilai tambah, serta berorientasi pada sustainability, ucap dia.