Consultants vital in SME development

Consultants vital in SME development

The Jakarta Post, Jakarta

Aside from supporting regulations, business consultants have
proved effective in developing small and medium enterprises
(SMEs), according to the Asian Development Bank (ADB).

The bank arrived at the conclusion through its implementation
of a project to empower SMEs in four regencies: Sragen and Pati
in Central Java, and Pare-Pare and Bulukumba in South Sulawesi.

"SMEs here face problems in getting access to funds and the
market. A business service provider is a solution, as it can
provide consultation, product quality control or technology
advice," project leader Peter Bissegger said on Friday.

The two-year, US$1.5 million project has just been completed.

Bissegger said the bank assisted 15 business service providers
in the regions, providing them with training programs and
arranging networking to financial institutions and other
resources so they could, in turn, provide consultancy services to
SMEs.

He said the bank also coordinated with local administrations
to review regulations and, if necessary, to revoke those which
did not support business, as well as to implement a one-stop
service policy to cut out bureaucratic hurdles.

"It takes a clean and strong leadership to implement these
things, since such policies kill part of some (governmental)
agencies and cut off their income. As we know, issuing a license
is considered a means to reap a profit," Bissegger said.

Hari Setyanto, a business policy advisor to the project, said
Sragen was one regency that had improved its regulations to
support SME development.

Since the project was initiated two years ago, the regency has
revoked several bylaws, including one that levied the
transportation of forestry and plantation products, and eased
procedural regulations on obtaining business licenses.

"The growth of SMEs there increased to 61 percent over the
past two years. The quality of industry-related bylaws has also
improved, because they were seriously analyzed before their
issue," he said.

SMEs, which comprise about 98 percent of the country's
businesses, have been facing difficulties in locating markets and
dealing with complicated regulations that have deterred many from
starting or expanding businesses.

Aside from the ADB, several local agencies are running support
programs for SMEs, such as the Indonesian Chamber of Commerce and
Industry (Kadin). Kadin is working to set up a trading center for
promoting SME products to both domestic and foreign markets.