Govt to disburse Rp 3.1t funds to SMEs

Govt to disburse Rp 3.1t funds to SMEs

The Jakarta Post, Jakarta

The government said on Wednesday it would disburse around Rp 3.1
trillion (US$364.71 million) in special loans for small and
medium enterprises (SMEs) next week.

Director-General of Financial Institutions Darmin Nasution
said that many of the channeling banks and financial institutions
had already fulfilled the necessary requirements.

"The funds will certainly be disbursed starting next week,"
Darmin said.

Among the channeling banks appointed by the government are
Bank Mandiri, Bank Syariah Mandiri, Bank Rakyat Indonesia, Bank
Tabungan Negara, and state-owned pawnshop operator Perum
Pegadaian.

Darmin, however, said that rural development banks (BPDs) were
yet to fulfill the requirements, including approval from the
local legislative council.

The government has promised the funds to help the SMEs obtain
working capital, a move which in turn should help create new
jobs.

SMEs form the backbone of the Indonesian economy. Government
records show that in 2002, SMEs totaled 3.03 million across the
country, or equal to 95.78 percent of the country's total
business units, and absorbed 11.89 million jobs.

According to Law No. 9/1995 on small enterprises, a small-
scale enterprise is defined as one having net assets of up to Rp
200 million ($23,500) and maximum annual sales of Rp 1 billion.

Meanwhile, a medium-scale company is defined as one having
annual sales of between Rp 1 billion to Rp 50 billion.