Govt disburses Rp 4t in subsidized loans

JAKARTA (JP): The government has so far disbursed over Rp 4 trillion (US$470.59 million) of the Rp 10.8 trillion in heavily subsidized loans allocated to help small and medium-scale companies survive the economic crisis, Minister of Cooperatives and Small Enterprises Adi Sasono said here on Monday.

"I'm glad that we were able to disburse around 40 percent of the loans over the last five months (October to February) despite some difficulties in channeling the funds," he said.

He said that he hoped all the funds could be disbursed by the end this of year to help companies survive the crisis.

"But if we can not, the loans will be used for next year's program," he added.

The government introduced in October last year a subsidized loan package worth Rp 10.8 trillion to fund 17 microcredit schemes designed to help small and medium-scale cooperatives survive the prolonged economic crisis.

Loans issued under the scheme have interest rates of between 6 percent and 16 percent a year, compared to the nearly 40 percent interest rate charged for commercial loans. The subsidized loans are disbursed through commercial banks with the help of cooperatives and non-governmental organizations across the country.

The loans cover almost all sectors of the economy, including farming, fisheries, housing, trade and commerce, and poultry farming.

The director general of financing and development services at the ministry, Deswandhy Agusman, said that as of Feb. 26 the government had channeled Rp 2.96 trillion to farmers.

"The loans have been channeled to 2.98 million farmers through 5,472 cooperatives and 115 non-governmental organizations nationwide," he said.

He said the government had also disbursed Rp 45.6 billion of the Rp 794.3 billion allocated to finance rice procurement by cooperatives and non-governmental organizations.

"The loans have been used to procure 95,887 metric tons of rice from farmers at floor price," he said.

He added that the cooperatives were expected to procure at least two million tons of unhusked rice from local farmers using the Rp 794.3 billion loan.

He said the government had also distributed Rp 600 billion in loans to be used by members of cooperatives as working capital, and Rp 250 billion in loans for cooperatives to buy and distribute foodstuffs.

Deswandhy said that the government had also disbursed Rp 2 billion in loans for small and medium-scale entrepreneurs. Another Rp 125 billion in credits for technology application in the alleviation of poverty were disbursed to small and medium- scale businesses and poor families.

Adi denied that the disbursement of subsidized loans was part of the government's political maneuvering to win the hearts of the people in the upcoming general election.

"We are not engaging in what you call 'money politics'. This program is not related to the general election. Besides, we are not just giving money. These loans have to be repaid by the recipients."

Adi said that the government's goal was to increase the number of small and medium-scale entrepreneurs by 3.1 percent and 3.97 percent respectively. This would increase the number of such firms to 43,999 and 46,353 respectively in 2000, compared to 42,678 firms and 44,854 firms in 1999.

"If we can help small businesses ease their capital problems, I believe that we might further alleviate poverty," he said. (gis)