Danantara Advocates for Debtor Protection to Boost Indonesian Entrepreneurship

Current Challenges in Indonesian Financing System

Danantara, a state-owned credit guarantee institution, emphasizes the importance of credit guarantee in fostering entrepreneurial spirit in Indonesia. According to Danantara's Head of Equity Research, Satria Sambijantoro, Indonesia's financing system currently favors creditors (financial institutions) over debtors (entrepreneurs). This approach differs significantly from practices in developed countries like the United States, where there's stronger protection for debtors.

International Best Practices: Chapter 11 Bankruptcy Law

Satria highlighted that the United States' Chapter 11 Bankruptcy Law provides a framework that views bankruptcy as a normal consequence of business activities. This legal protection enables entrepreneurs to restructure their businesses and recover from failures. The law has supported many U.S. entrepreneurs who, after experiencing bankruptcy, have successfully revived their businesses.

Recommendations for Indonesia's Financial Ecosystem

While Danantara is often perceived as an elite institution, Satria emphasized that it plays an inclusive role in supporting the national economy. In the short term, Danantara focuses on supporting economic growth through active involvement of state-owned enterprises (BUMN) in sectors that directly impact the national economy. For the financial services industry, Danantara sees credit guarantee as a vital component in strengthening the financing ecosystem.

Balancing Credit Guarantee and Debtor Protection

The proposed debtor protection system aims to create a more balanced financial ecosystem in Indonesia. By providing legal certainty for restructuring and protecting debtors, Indonesia can potentially encourage more entrepreneurial activities and risk-taking in business. This approach aligns with Danantara's mission to support the development of Indonesia's financial services sector while promoting economic growth.