Govt, ADB to channel $85m in loans for SMEs<\/p>\n
Evi Mariani, The Jakarta Post, Jakarta<\/p>\n
The government and the Asian Development Bank (ADB) will
\nchannel US$85 million in loans for small- and medium-scale
\nexporters across the country by the end of this year, in a bid to
\npromote economic growth and job creation.<\/p>\n
Small and medium enterprises (SMEs) form the backbone of the
\nIndonesian economy. Government records show that in 2002, SMEs
\ntotaled 3.03 million across the country, or equal to 95.78
\npercent of the country's total business units, and absorbed 11.89
\nmillion jobs.<\/p>\n
The government has appointed Bank Ekspor Indonesia to
\nadminister the loans, said Agus Tjahajana, Director General for
\nSmall and Medium Enterprises at the Ministry of Industry and
\nTrade.<\/p>\n
"The loans will be channeled by the end of this year through a
\nconsortium consisting of several banks such as BNI, Bank Mandiri
\nand (Bank) Danamon," he told reporters on Thursday.<\/p>\n
He said that small and medium enterprises were each entitled
\nto borrow a maximum of $600,000 at an interest rate of 1 to 2
\npercent below the average commercial lending rate. The commercial
\nlending rate now stands between 15 and 16 percent.<\/p>\n
ADB approved the $85-million loan for the Small and Medium
\nEnterprise Export Development Project in December last year,
\nwhich aims to assist Indonesian exporters in modernizing and
\nexpanding their business.<\/p>\n
The bank expects the project, due for completion toward the
\nend of 2007, to create 1.5 million jobs.<\/p>\n
Aside from the loan, ADB will also grant $500,000 to support
\nbank appraisals and small exporters' eligibility to apply for
\ncredit.<\/p>\n
An ADB report shows only one in five SMEs has access to bank
\ncredit, leaving untapped a great potential to fund profitable
\nsmall projects to create and sustain new jobs.<\/p>\n
The bank estimates the total cost of the project at $113
\nmillion, 25 percent of which will be provided by participating
\nbanks and sub-borrowers.<\/p>\n
According to Law No. 9\/1995 on small enterprises, a small-
\nscale enterprise is defined as one having net assets of up to Rp
\n200 million ($23,500) and maximum annual sales of Rp 1 billion.<\/p>\n
The government is currently formulating a definition for
\nmedium-scale enterprises. For the time being, according to a
\ngovernment publication on SMEs, a medium-scale company is defined
\nas one having annual sales of between Rp 1 billion to Rp 50
\nbillion.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-adb-to-channel-85m-in-loans-for-smes-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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