Loans to small businesses still below target<\/p>\n
The Jakarta Post
\nJakarta<\/p>\n
Credits funneled by the banking sector to cooperatives and
\nsmall and medium enterprises (SMEs) reached Rp 24.8 trillion
\n(US$2.9 billion) as of the third quarter of 2003, a minister has
\nsaid.<\/p>\n
The amount represented only around 58 percent of the full-year
\ntarget of Rp 42.4 trillion, State Minister of Cooperatives and
\nSMEs H. Alimarwan Hanan told legislators during a hearing with
\nthe House's Commission V for state enterprises, industry and
\ntrade on Tuesday.<\/p>\n
The situation was a stark contrast as compared with that of
\nthe previous year, when during the same period, credits provided
\nto the sector accounted for more than 70 percent of the yearly
\ntarget.<\/p>\n
In 2003, the full-year credit realization for SMEs reached 116
\npercent of the target of Rp 30.9 trillion.<\/p>\n
Alimarwan did not provide reasons for the shortfalls.<\/p>\n
The target was set by Bank Indonesia together with the
\nPoverty Eradication Committee, headed by Coordinating Minister
\nfor People's Welfare Jusuf Kalla and tasked to coordinate efforts
\nto empower cooperatives and SMEs.<\/p>\n
The two institutions signed a memorandum of understanding
\nthree years ago to let national banks channel a certain amount of
\nloans to SMEs and include the scheme in their annual business
\nplans.<\/p>\n
The scheme was meant to develop SMEs and to boost economic
\nactivities and create more job opportunities and thus reduce
\nchronic poverty. The program aims to reduce the national poverty
\nrate from the current 16 percent to 14 percent of the population
\nby the end of 2004.<\/p>\n
Lending to SMEs is of high priority, given their strategic
\nrole in the country's economy. In 2002, there were 3.03 million
\nSMEs across the country -- equal to 95.78 percent of the
\ncountry's business units -- and absorbed 12 million jobs.<\/p>\n
Elsewhere, Alimarwan also said that during 1998-2003 period,
\nfunds from the state budget allocated to the sector amounted to
\nRp 1.7 trillion, while those from outside the budget, including
\nthe banking sector, totaled Rp 79.8 trillion.<\/p>",
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