JAKARTA. Good news for the guarantee industry. The Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK) is preparing regulations on reserving in credit guarantee companies. This is the first such policy since guarantee companies have never been required to provide reserves before.
The new regulation will revise the Minister of Finance Regulation Number 222/2008 concerning Credit Guarantee Companies and Credit Reinsurance Companies. The goal is to ensure companies are better prepared for claims. If a claim is of significant value, it could drain the company's liquidity, ultimately affecting the financial health of the guarantee company.
Moreover, the guarantee industry in Indonesia is still relatively new, meaning its capital is not yet extensive. "Local companies' reputations are also far behind those in developed countries," said M. Ihsanudin, Head of the Financing and Guarantee Bureau at Bapepam-LK, yesterday.
In developed countries such as Japan, guarantee companies receive government support in the form of full protection or backing in case of large claims. In Indonesia, however, the government only backs guarantee claims for the People's Business Credit (KUR) program.
Bapepam-LK is also working on developing the guarantee industry. This is outlined in the 2010-2014 master plan for the capital market and non-bank financial industry. Bapepam-LK aims to attract private sector involvement in this industry.
For now, only one private company has entered the sector under PT Penjaminan Kredit Pengusaha Indonesia (PKPI). Other players in the industry come from central and regional government-backed entities.
Reducing Taxes
Under the new regulation, companies will be required to allocate reserves amounting to approximately 0.25% of their total guarantees. This amount is relatively small. "We do not want it to significantly reduce investment value," said Ihsanuddin.
Besides improving financial health, this policy will also benefit companies. The reserves will be classified as expenses, thereby reducing taxable income.
Bapepam-LK aims to finalize and enforce this regulation before the end of 2011. "It should have been completed last year, but delays occurred due to numerous changes," said Ihsanuddin.
Krisnaraga Syarfuan, President Director of PT Penjaminan Kredit Pengusaha Indonesia (PKPI), welcomed this plan, although his company has already been allocating reserves voluntarily. However, without formal regulation, these reserves have not been officially recognized as expenses. "As a result, they are not yet acknowledged for tax purposes," he explained.
Nahid Hudaya, President Director of Perum Jaminan Kredit Indonesia (Jamkrindo), also agreed. He stated that reserving acts as a safeguard for guarantee companies, ultimately improving their financial stability. "We have been discussing this for a long time, and now we finally see some response," he said.
Source: http://keuangan.kontan.co.id/v2/read/keuangan/62465/Wajib-punya-bantalan-biar-lebih-aman