The creative economy can use assets to lend – Indonesia Expat

President Joko Widodo (Jokowi) issued Government Regulation Number 24 of 2022 regarding the creative economy, authorizing the use of movies and YouTube content as collateral for financial debt.

In this regulation, the government facilitates IP-based funding mechanisms through banking financial institutions and non-banking financial institutions for creative economy actors. Therefore, intellectual property products such as movies or songs can be used as collateral for debts to bank and non-bank financial institutions.

The regulations state that there are at least 17 creative economy sub-sectors in Indonesia that can be used as collateral for bank loans:

  1. Game developers
  2. Architecture
  3. Interior design
  4. Music
  5. fine arts
  6. Product design
  7. Fashion
  8. Food
  9. Animation film and video
  10. Photography
  11. Visual communication design
  12. Television
  13. Radio
  14. advertising craft
  15. performing arts
  16. Editing
  17. Apps

Moreover, the content uploaded on YouTube that gains a lot of views can also be a guarantee of debt in banks and non-banks.

Bank Permata chief economist Josua Pardede said the main challenge when taking creative works as collateral for funding is standardizing valuations, which can have wide discrepancies. Some products can be more easily evaluated, such as songs or music and games, which can be judged by their sales performance.

Another challenge is the ability to prevent others from producing the same. For songs or games, for example, the patent holder is able to prevent piracy to some extent.

“So far, Indonesia’s patent law is still not strict enough, it is believed that the banking sector will not take creative works as the main collateral in the short term. As patent law is still lax in Indonesia, piracy can still occur, reducing the value of creative works,” Pardede said.

Meanwhile, the General Secretary of PT Bank Negara Indonesia (Persero) or BNI Mucharom said that BNI strongly supports the new regulation of Jokowi as this new mechanism will make it easier for the community to obtain finance to support their businesses. However, the company still needs certainty regarding intellectual property rights certificates, which have not yet been regulated.

Indonesian director Hanung Bramantyo also welcomed the new regulations.

I really support it if, for example, the government provides regulations that regulate how intellectual property rights in the form of films, novels, paintings or other works of art can be used as collateral for loans banks to carry out other economic activities“said Bramantyo.

Works of art such as movies, paintings, songs, etc. must have a significant economic impact that continues to generate money even after the death of the creator of the work. Therefore, Indonesia should adopt a policy that makes intellectual property an asset that can be accepted by banks as collateral for debt.

He said that in developed countries such as the United States and South Korea, the use of creative economy works can also be used as collateral for debt.

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