Govt charged with badly managing aid to small firms<\/p>\n
JAKARTA (JP): Members of the House of Representatives charged
\nthe government yesterday with improperly managing funds of about
\nRp 500 billion (US$227.27 million) set aside by state-owned firms
\nto support small businesses and cooperatives.<\/p>\n
Eko Sumista of the House's Finance and Trade Commission said
\nin a hearing with Minister of Finance Mar'ie Muhammad that the
\ngovernment's weakness in managing the funds is not only in its
\ndistribution but also in the collection of the facilities.<\/p>\n
\"Recipients are often not aware that the money should be
\nreturned to the government,\" Eko said.<\/p>\n
State-owned companies are required to set aside one percent to
\nfive percent of their profits, depending on the scale of their
\nbusinesses, to help around 25 million small-scale companies and
\ncooperatives in the country.<\/p>\n
The distribution of the financial aid scheme was introduced in
\nthe early 1990s as alternative funding to help small-scale
\ncompanies and cooperatives.<\/p>\n
The government, in fact, has also instructed banks to provide
\nat least 20 percent of their lendings to small-scale businesses,
\nbut the banks often escape the mandatory lending not only due to
\nthe fact that most small-scale businesses are unviable but also
\nbecause of the higher costs they have to cover in providing such
\nloans. Many banks were reported to have bought the small-scale
\nloans of other banks to meet the government's 20 percent
\nmandatory lending.<\/p>\n
Management<\/p>\n
House members and business analysts said that the loan
\nfacilities from state-owned companies are not properly managed
\ndue to the absence of a special agency handling the facilities.<\/p>\n
The interest rates of the state-owned loan facilities are
\naround 10 percent, less than half of the lending rates charged by
\ncommercial banks.<\/p>\n
The facility sometimes benefits only those who have a good
\nrelationship with state-owned companies, the members said.<\/p>\n
Director General for State Enterprises Martiono Hadianto said
\nthat state-owned companies have set aside nearly Rp 500 billion
\nof their profits to help small-scale businesses and cooperatives.<\/p>\n
He said around Rp 384.3 billion, equivalent to around 70
\npercent of the total funds, had been distributed as low-interest
\nfinancial aid to 423,000 small-scale companies and around 15,000
\ncooperatives in the country.<\/p>\n
\"The government plans to distribute another Rp 226 billion
\nthis year,\" he said.<\/p>\n
Also speaking at the hearing with the House's Finance and
\nTrade Commission, Martiono said that his office, as lead
\ncoordinator of state-owned companies' financial aid scheme, has
\ncooperated with other government agencies to ensure the
\neffectiveness of the loan facility and to guarantee its fair
\ndistribution.<\/p>\n
\"We continue improving the system in order to increase the
\ncoverage of the loan facility and to improve collectibility,\" he
\nsaid. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-charged-with-badly-managing-aid-to-small-firms-1447893297",
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