Govt disburses Rp 4t in subsidized loans

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)