Govt to issue new ruling on small businesses

JAKARTA (JP): The government plans to issue a new regulation that would improve the current system used by small businesses when consigning their goods for sale, Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya said yesterday.

Speaking at a hearing with House Commission VII for finance, trade, cooperatives and logistics, Subiakto said that small businesses have to wait between two and three months after they consign their products to supermarkets to get paid.

Harmful

He said the current system is particularly harmful to small firms which make products that break or rot quickly. "Financial burdens from broken products are borne by small suppliers.

"The system harms their development. Therefore we want to design a new regulation to protect their interests," he said.

Subiakto added that the new regulation would streamline the payment system by adopting a factoring mechanism that would allow small firms acting as suppliers to get their money faster.

"We're hoping to make supermarkets or other big companies bear the risks of small firms. Otherwise, the small businesses will end up subsidizing the big ones. This is not fair at all," he said.

Subiakto also discussed the results of his recent visit to the United States to see how cooperatives and small businesses are developing there.

Subiakto said that Indonesia may set up a government institution dealing with the development of small firms modeled on the Small Business Administration (SBA) of the United States.

"We've reached an agreement with the SBA to provide technical assistance for the establishment of a similar institution," he said. (13)