Government introduces new lending agency to help SMEs<\/p>\n
JAKARTA (JP): State Minister of the Empowerment of State
\nEnterprises Tanri Abeng announced on Thursday the establishment
\nof a finance institution designed to provide cheap financing to
\nsmall and medium-sized enterprises (SMEs).<\/p>\n
He said that the institution would begin operating immediately
\nwith a paid-up capital of Rp 1.5 trillion (some US$176.5
\nmillion), of which Rp 300 billion would be covered by the
\n1999\/2000 State Budget.<\/p>\n
\"We have been helping big companies in the past, and now its
\nthe turn for small companies,\" he said at a press conference.<\/p>\n
He added that the institution, called PT Permodalan Madani,
\nwould likely to focus on equity investment rather than credit
\nextension.<\/p>\n
He said that the financing institution would provide its
\nfacility to SMEs which needed capital of between Rp 500 million
\nand Rp 5 billion.<\/p>\n
The company would also operate as a mutual fund in the future,
\nwith the World Bank and the Asian Development Bank to provide
\ntechnical assistance, Tanri said.<\/p>\n
Opposition leaders have accused the government of practicing
\nmoney politics with this kind of heavily subsidized program ahead
\nof the June 7 general election.<\/p>\n
The government earlier said that it would extend the
\nmultibillion dollar social safety net program into June if the Rp
\n18 trillion allocated for the program in the 1998\/1999 fiscal
\nyear ending in March could not be disbursed by the end of the
\nfiscal year.<\/p>\n
The government reported that only around half of the Rp 12.60
\ntrillion released between October and January had been
\ndistributed due to technical difficulties in the disbursement
\nprocess.<\/p>\n
Some people have voiced suspicions that the fund has been
\ncorrupted by government officials.<\/p>\n
The social safety net program, which is partly financed by the
\ninternational community, is designed to help the poor survive the
\n19-month old economic crisis.<\/p>\n
The government also introduced a Rp 10.8 trillion microcredit
\nprogram in October to help cooperatives and SMEs survive the
\ncrisis.<\/p>\n
Minister of Cooperatives and Small Enterprises Adi Sasono
\nreported on Monday that some Rp 4 trillion of the heavily
\nsubsidized loans had been disbursed to cooperatives in various
\nsectors of the economy.<\/p>\n
These government subsidized loans aim to finance 17 credit
\nschemes with interest rates ranging from 6 percent to 16 percent,
\ncompared to the current commercial interest rates of more than 40
\npercent.<\/p>\n
Adi hoped that all the funds could be disbursed by the end of
\nthis year.<\/p>\n
He denied allegations that the credit program was a political
\nmaneuver by the government ahead of the general election.<\/p>\n
He pointed out that the program was launched to boost the
\nnumber of small and medium-sized enterprises by 3.1 percent and
\n3.9 percent respectively, to 43,999 small-sized firms and 46,353
\nmedium-sized firms by 2000, compared to the current 42,678 and
\n44,854 firms.(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/government-introduces-new-lending-agency-to-help-smes-1447893297",
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"sponsor": "Okusi Associates",
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