Govt empowers small businesses through bill on microfinancing<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
To accelerate and better coordinate the distribution of credit
\nfor small businesses here, the government is drafting a bill on
\nmicrofinancing for non-bank microfinancing institutions, a senior
\nofficial said.<\/p>\n
Dipo Alam, the chairman the National Committee for Microcredit
\nYear 2005 who is also the deputy minister to the Coordinating
\nMinister for the Economy, said in a recent press conference that
\nthe committee had designed several programs to enhance the
\nperformance of non-bank microfinancing institutions.<\/p>\n
\"(One of our programs) is to pass a law on such institutions,\"
\nDipo told reporters. He did not elaborate on the details as the
\nbill had not yet been completed.<\/p>\n
However, the bill is expected to serve as a legal basis for
\nthe institutions and to coordinate thousands of non-bank
\nfinancing agencies currently serving micro businesses.<\/p>\n
Microcredit is defined by the central bank as a loan below Rp
\n50 million (US$5,373).<\/p>\n
The committee's deputy chairman Kusmulyono said there were at
\npresent some 50,000 non-bank financing bodies in the country,
\nsuch as cooperatives and credit banks, in addition to hundreds of
\nbanks including Bank Rakyat Indonesia's village units and
\nregional development banks.<\/p>\n
\"This is the right time to strengthen them,\" said Kusmulyono,
\nalso president of government's investment firm PT Permodalan
\nNasional Madani (PNM).<\/p>\n
The bill however, would not regulate non-governmental
\norganizations (NGOs) that are providing saving and lending
\nfacilities for micro businesses using funds from donors, he
\nadded.<\/p>\n
Such NGOs, many of which operate in remote areas where there
\nare no formal financing bodies, have repeatedly asked the
\ngovernment to recognize their efforts and draft a law to protect
\ntheir activities.<\/p>\n
\"PNM will encourage those NGOs to become formal bodies (into
\nfinancing bodies), so that they can be audited and regulated
\nunder the bill,\" said Kusmulyono further.<\/p>\n
The bill is expected to be passed later this year, he added.<\/p>\n
The move is in conjunction with the implementation of the
\nInternational Microcredit Year 2005, which was launched by the
\nUnited Nations in November last year as an effort to help fight
\npoverty.<\/p>\n
The national committee was established in August last year,
\ngrouping together representatives of the coordinating minister
\nfor the economy, coordinating minister for people's welfare,
\nministry of trade, state minister of cooperatives and small and
\nmedium enterprises, BRI, Bank Mandiri, and the University of
\nIndonesia.<\/p>\n
Noted Indonesian singer Anggun also attended the press
\nconference and has been appointed as a spokeswoman in Indonesia
\nand other Asian countries for the UN program.<\/p>",
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"sponsor": "Okusi Associates",
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