Indonesian Textile Industry Struggles with Credit Access Amid Import Pressure

Challenges in Securing Working Capital

The Indonesian textile and textile products (TPT) industry is facing significant challenges in accessing credit, with companies reporting widespread rejection by banking institutions. PT Mayer Indah Indonesia, a TPT sector company, recently approached over 20 banks to secure working capital loans but was met with refusal across the board. According to Melisa Suria, General Manager of PT Mayer Indah Indonesia, the primary reason cited by banks was the industry's high-risk profile.

Industry-Wide Implications

The credit crunch comes at a time when the textile industry is already grappling with intense competition from imported textile products and illegal goods. The lack of access to financing is likely to exacerbate the challenges faced by textile manufacturers, potentially leading to further industry consolidation or capacity reductions. This situation highlights the need for targeted financial support or regulatory interventions to support the industry's sustainability.

Government and Industry Response

The issue was recently raised during a meeting with Finance Minister Purbaya Yudhi Sadewa, indicating growing concern at the government level about the industry's financial health. Both the government and industry associations, such as APSyFI and AGTI, are expected to play crucial roles in addressing these challenges through potential policy measures or industry-wide initiatives.