Cooperatives, SMEs remain neglected<\/p>\n
Rendi A. Witular and Yuli Tri Suwarni, The Jakarta Post, Bandung<\/p>\n
The country's cooperatives and small-medium enterprises (SMEs)
\nremain underdeveloped and commitments to assist their financing
\nby the government, banks and corporate business has not
\nmaterialized.<\/p>\n
The sluggish development of the sector, which played a key
\nrole in cushioning the impact of the late 1990s financial crisis
\non the nation's economy, was of great concern, said State
\nMinister of Cooperatives and SMEs Suryadharma Ali.<\/p>\n
\"Lack of access to financial resources, poor bargaining power
\nagainst the corporate sector, and an inability to increase
\nproduction capacity are some of the key problems currently facing
\nthe sector,\" he said.<\/p>\n
Suryadharma made his remarks during a launching ceremony for
\nmicro financing year on Tuesday in conjunction with National
\nCooperatives Day. The ceremony was also attended by President
\nSusilo Bambang Yudhoyono.<\/p>\n
In his speech, Suryadharma emphasized the need for the
\nbusiness community, including state enterprises, to immediately
\nrealize their promises to assist in nurturing the cooperative and
\nSME sector.<\/p>\n
\"Lending for these small businesses is still hard to get. Not
\nto mention the high interest on loans as well as burdening
\ncollateral if they manage to secure them. State-controlled and
\nprivately owned banks are still difficult and cannot be relied
\nupon,\" he said.<\/p>\n
The central bank and the government have ordered local banks
\nto allocate a total of some Rp 60.4 trillion (US$6.20 billion) in
\nlending this year for cooperatives and small-medium businesses.
\nThe figure is lower than last year's lending realization for the
\nsector worth about Rp 75 trillion.<\/p>\n
In response to the lack of commitment by state-controlled
\nbanks in assisting small businesses, Coordinating Minister for
\nthe Economy Aburizal Bakrie said banks could not be blamed for
\nthe problems since their focus was to seek higher profits for the
\nstate.<\/p>\n
\"The government cannot not force banks to channel more of
\ntheir loans to small and medium businesses. They should calculate
\ntheir lending based purely on business considerations and in
\norder to bring in more profits for the state,\" said Aburizal.<\/p>\n
At present, there are 130,000 cooperatives and 4.5 million
\nSMEs throughout the country. The government has targeted the
\nnumber of cooperatives to soar to as many as six million by 2009.<\/p>\n
Meanwhile, President Susilo acknowledged that there were still
\nnumerous problems confronting the country's small and medium
\nbusinesses, but the government was upbeat the sector would grow
\nsignificantly with the intense involvement of other parties.<\/p>\n
\"We understand that the development of the sector is not yet
\nmaximal. But we are heading toward improvement,\" said Susilo.<\/p>\n
Susilo said that the government was now focusing on improving
\navailability to financial resources for the sector, as well as
\nits management, worker productivity, marketing, and partnership
\nwith the corporate sector.<\/p>\n
During the ceremony, Susilo also witnessed the disbursement of
\nloans worth Rp 443 billion from state-controlled banks, financial
\ninstitutions, cooperatives and corporations, to 49 cooperatives
\nand 6,900 SMEs.<\/p>\n
Susilo said the funds were expected to help accelerate their
\ndevelopment.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cooperatives-smes-remain-neglected-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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