Govt seeks funds to boost microcredit program<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
The government plans to use proceeds from state-owned enterprises
\n(SOEs), in addition to idle funds in banks, to finance the
\nexpansion of microcredits next year.<\/p>\n
It will also ask donor countries grouped in the Consultative
\nGroup on Indonesia to focus more attention on microcredits at
\ntheir meeting in January.<\/p>\n
Speaking after a meeting on Friday with officials from the
\nCoordinating Minister for the Economy to discuss the Year of the
\nMicrocredit program, the director of state-owned investment firm
\nPT Permodalan Nasional Madani (PNM), B.S. Kusmulyono, said the
\ngovernment planned to mobilize as much domestic funding as
\npossible for the program.<\/p>\n
Kusmulyono said these funds would include some Rp 150 trillion
\n(US$16.7 billion) that was lying idle in banks.<\/p>\n
\"There is also some Rp 1 trillion in proceeds from SOEs that
\nthe government has targeted for next year,\" he said.<\/p>\n
The United Nations has named 2005 as the International Year of
\nthe Microcredit, which the government will implement here. The
\ngovernment has appointed PNM to manage lenders -- including
\nstate-owned pawnshop Perum Pegadaian and regional development
\nbanks -- in channeling microcredits.<\/p>\n
Microcredit, first conceived by rural economics professor
\nMuhammad Yunus in Bangladesh in 1976, is a concept of providing
\nloans to small entrepreneurs who would likely be ineligible for
\nbank loans under traditional means of evaluating credit-
\nworthiness.<\/p>\n
Kusmulyono said the funds from the SOE proceeds would likely
\nbe in the form of a loan, to be managed by PNM.<\/p>\n
\"We are still in talks with the Office of the State Minister
\nfor State Enterprises,\" he said. \"It should be agreed during the
\nshareholders meetings of the SOEs to allocate 5 percent of their
\nprofits for microcredits.\"<\/p>\n
Kusmulyono said the funds would also be used for poverty
\neradication projects, particularly for the improvement of housing
\nin slum areas.<\/p>\n
\"We plan to improve 300,000 houses in 30 cities throughout the
\ncountry,\" he said.<\/p>\n
PNM also has received $4.5 million in funds from the Asian
\nDevelopment Bank for the program, under which each recipient will
\nreceive Rp 5 million.<\/p>\n
A deputy at the Office of the Coordinating Minister for the
\nEconomy, Dipo Alam, said the housing improvement project was
\nincluded in the microcredit program because it would help small
\nentrepreneurs increase their productivity.<\/p>\n
\"If they have better housing, then they can work better and
\nimprove their businesses,\" he said.<\/p>\n
Dipo also said the government would propose that donor
\ncountries establish a forum on microcredits at their meeting in
\nJanuary.<\/p>\n
\"We hope that they will help drive small businesses, besides
\njust helping to fund large-scale projects.<\/p>\n
\"We will also work on needed regulations so that non-bank
\nlenders can participate in channeling microcredits,\" he said.<\/p>\n
The latest government data shows that only 15 percent of some
\n30 million micro-entrepreneurs in the country receive financing
\nfrom banks.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-seeks-funds-to-boost-microcredit-program-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}