Bank told to provide Rp 20t for SMEs

Bank told to provide Rp 20t for SMEs

The Jakarta Post, Jakarta

In an another bid to empower the country's small and medium
enterprises, the government has launched a program to provide a
total of Rp 20 trillion in bank loans per year for small and
medium enterprises (SMEs).

Coordinating Minister for People's Welfare Yusuf Kalla told
reporters on Monday that under the program, domestic banks would
provide loans for SMEs with the government providing assistance,
such as supervision and insurance guarantees.

"The government will subsidize (supervision and insurance
guarantees) with state budget funds allocated for (the
empowerment of) micro entrepreneurs," Yusuf told reporters after
a Cabinet meeting.

He said 15 domestic banks had voiced readiness to participate
in the program, including state Bank Rakyat Indonesia (BRI) and
Bank Negara Indonesia '46 (BNI).

"Domestic banks should clearly show with whom they side,"
Yusuf said, adding that the program was part of the government
program to alleviate poverty.

Yusuf said starting this year, the banks would provide a total
of Rp 20 trillion in loans for SMEs, but he did not specify when
the program would end.

Quoting data from the Central Bureau of Statistics, Yusuf said
19 percent of the country's population, or 38 million people,
lived in poverty, with a monthly family income of Rp 450,000 per
month.

The credit-for-SMEs program is the latest in a series of
programs recently announced by the government to promote SMEs,
which analysts say absorb most of the country's workforce. Many
have been able to weather the economic crisis but others are
still in the doldrums due to outstanding debt.

Some parties, including several legislators, have been pushing
the government to alleviate the firms' financial burdens by
cutting their debts.