Resilient SMEs still facing problems<\/p>\n
Evi Mariani, The Jakarta Post, Jakarta<\/p>\n
Small and medium scale enterprises (SMEs) -- which have proved
\nmore resilient than many corporate giants in coping with the
\neconomic crisis -- still struggle with persistent problems in
\ntapping overseas markets, according to a government paper.<\/p>\n
The problems include the lack of access to banking credits and
\nlack of skills in packaging products, according to the paper
\nwritten by the directorate general for SMEs at the Ministry of
\nIndustry and Trade.<\/p>\n
\"SMEs' ability in acquiring banking credits is limited,
\nbecause, among others, they do not own collateral.<\/p>\n
\"Also, their products do not have good package designs,\" the
\npaper said.<\/p>\n
Concerning the problems relating to banking credits, the
\ngovernment and the Asian Development Bank (ADB) are seeking to
\nsolve them by channeling US$85 million in loans to small and
\nmedium scale exporters by the end of this year, with lending
\nrates of between 1 to 2 percent below the average commercial
\nrate.<\/p>\n
In order to address problems relating to packaging design, the
\ngovernment has developed a design center at the ministry, with
\nthe cooperation of art and design students, from the Bandung
\nInstitute of Technology in West Java's capital of Bandung and the
\nIndonesian Art Institute in Yogyakarta.<\/p>\n
\"SMEs can choose and use for free from the ministry the
\ndesigns for packaging their products,\" Agus Tjahajana, the
\ndirector general for SMEs, told reporters last week. \"It is
\ndifficult for them to tap larger markets if they continue using
\nphotocopied logos and packaging.\"<\/p>\n
The design center has produced dozens of computer-designed
\nlogos and brands for products such as snacks, coffee, and various
\ntraditional foods.<\/p>\n
Both programs -- the design center and loan assistance -- aim
\nto boost SMEs' exports. In 2002, SMEs contributed a total of
\n$2.51 billion to the country's exports, according to government
\ndata.<\/p>\n
The ministry is also organizing an exhibition in Sharjah,
\nUnited Arab Emirates, to help SMEs boost their export to Africa
\nand the Middle East. The expo will take place in mid-September.<\/p>\n
However, the paper conceded that, thus far, the government was
\nstill focusing on large companies, despite the fact that SMEs
\nmake up most of the country's businesses. In 2002, SMEs reached
\n3.03 million, or more than 95 percent of the country's total
\nbusiness units, and absorbed 11.89 million workers.<\/p>\n
The government has often committed to help improve SMEs'
\nperformance but, the paper said, in reality, it has yet to
\ninstigate regulations favorable to SMEs.<\/p>\n
\"The government has yet to formulate an incentive system,
\nspecial tariffs, subsidies or technical assistance for SMEs or
\nprotect them against (large) corporation's tricks,\" the paper
\nsaid.<\/p>\n
Agus said small companies producing machine or auto parts were
\noften exploited by wholesalers from Jakarta or Surabaya.<\/p>\n
\"For example, an auto-parts merchant from Sawah Besar
\n(auto-parts center in Jakarta), ordered cheap auto-parts from an
\nSME in a small town in West Java,\" he explained. \"The merchant
\npackaged the parts, stating that they were made in China or
\nThailand, only to sell them for much more.\"<\/p>\n
In order to protect small and medium producers from being
\nmanipulated by traders, the ministry is studying the possibility
\nof developing special markets where they can meet with buyers
\nface to face, he said.<\/p>\n
For instance, he said, the ministry is developing machine and
\nauto-parts markets, one in Semarang, Central Java and another one
\nin Cirebon, West Java.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/resilient-smes-still-facing-problems-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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