JAKARTA – The Ministry of Finance will reduce the paid-up capital requirement for establishing guarantee companies through a revision of Minister of Finance Regulation (PMK) No. 222/2008 on Credit Guarantee Companies and Credit Reinsurance Companies.
The revision is currently in its final stages and will soon be approved by the Minister of Finance to accelerate the growth of the guarantee industry, which has been slow to develop.
Under Article 11 of the current PMK, the minimum paid-up capital required for establishing a guarantee company is set at:
- Rp100 billion for nationwide coverage
- Rp50 billion for provincial-level operations
- Rp1 trillion for credit reinsurance companies
Head of the Financing and Guarantee Bureau at Bapepam-LK, M. Ihsanuddin, stated that one of the key points in the revision is the reduction of the Rp50 billion capital requirement for provincial-level guarantee companies.
The capital reduction considers the financial capacity of regional governments while ensuring an adequate capital structure to minimize financial risks in establishing guarantee companies. Ideally, the paid-up capital for provincial-level guarantee companies should be Rp25 billion.
"We cannot yet confirm the exact reduction from Rp50 billion as the revision is still being finalized. The final decision rests with the Minister of Finance. However, an ideal amount for provincial-level companies would be Rp25 billion," Ihsanuddin stated in Jakarta last weekend.
He explained that the Rp50 billion capital requirement has been a burden for regional governments seeking to establish guarantee companies. As a result, several applications have been rejected by regulators, including those from the regional governments of DKI Jakarta, Central Java, Banten, Bangka Belitung, and Yogyakarta.
(Source: bisnis.com)