Council summons local heads over microcredit scheme
Council summons local heads over microcredit scheme
Damar Harsanto, The Jakarta Post, Jakarta
The City Council plans to evaluate the Subdistrict Residents
Empowerment Program (PPMK) in five municipalities and one
regency, amid suspicions that the microcredit scheme has been
marred by irregularities.
"We have summoned the heads of the community empowerment
boards (BPM) responsible for the scheme to deliver their progress
reports next week," said councillor Dani Anwar, who chairs
Commission E for social welfare.
He said only 45 of 65 subdistricts in East Jakarta had
submitted reports on the program's implementation in the 2002-
2004 period. Jakarta has a total of 267 subdistricts, all
received PPMK funds.
"The hearing next week will help us decide whether to approve
the proposed additional PPMK funds for next year," he said.
In the draft of the 2005 budget, the administration proposed a
total of Rp 267 billion, a 53 percent increase from the current
Rp 175 billion for the program, which is aimed at empowering
small businesses at subdistrict level.
Dani said Commission E planned to conduct field checks in
several subdistricts that had reportedly failed to implement the
program properly.
The PPMK was first launched in 2001 in 25 subdistricts, each
received funds of Rp 2 billion. The program was then expanded to
all subdistricts in the city in an effort to empower local
communities, particularly small businesses through revolving soft
loans.
Irregularities in the program have been rife according to
observers, who blame the administration's poor monitoring of
local communities, which were unprepared to handle such large
sums of money.
Last year, two members of the subdistrict council (Dekel) in
Serdang, Kemayoran, who were in charge of channeling the fund,
were sent to prison for misusing funds of Rp 700 million.
East Jakarta Community Empowerment Board acting head Endjang
Abdullah, acknowledged the problems in the program.
"Many residents continue to misinterpret the program as a
means to easy money, with no strings attached ... Most of the
subdistricts are not channeling the funds in accordance with the
priority scale, which is needs-based," Endjang said.
As of September this year, he said, the municipality had
disbursed total funds of Rp 14.775 billion among 20,173
recipients.
"Unfortunately, some Rp 2.930 billion has turned out to be bad
debts."
Proposed PPMK funds in 2005
Municipality/Regency Subdistricts Fund allocation
C. Jakarta 44 Rp 43.780 billion
N. Jakarta 31 Rp 33.980 billion
W. Jakarta 56 Rp 55.290 billion
S. Jakarta 65 Rp 63.030 billion
E. Jakarta 65 Rp 64.920 billion
Kepulauan Seribu 6 Rp 6 billion
Total Rp 267 billion
Source: draft of the 2005 city budget