Ministry of UMKM Prepares Intellectual Property Rights Regulations as Collateral for Financing

The Ministry of Micro-, Small- and Medium-Scale Enterprises (“UMKM”) is responding to the Ministry of Law's program related to an intellectual property right (Hak Kekayaan Intelektual/HKI)-based financing scheme for UMKM entrepreneurs. Deputy Minister of Micro-Scale Enterprises at the Ministry of UMKM, Rizha Damanik, said that the policy needs to be further regulated to guarantee UMKM financing.

“It is hoped that this can be legalized and formalized so that it can be used as part of the guarantee for business loans in the future,” said Rizha.

Following up on this program, a number of steps have been taken by the Ministry of UMKM. Among them, said Rizha, is the development of a mechanism for assessing the valuation of HKI assets as collateral.

Additionally, the ministry is strengthening the participation and role of financing institutions in implementing HKI as credit guarantees and promoting intellectual property (Kekayaan Intelektual - “KI”) insurance guarantees to mitigate the risk of default from the banking sector.

“We have already discussed this with the Director-General of KI. We are beginning to prepare a method for assessing the valuation of HKI assets,” he added.