Govt to launch microfinancing year

Govt to launch microfinancing year

Muninggar Sri Saraswati, The Jakarta Post, Jakarta

The government is set to kick off the Year of the Micro Business
and will allocate Rp 50 trillion (US$5.4 billion) to empower
micro, small and medium enterprises nationwide, a minister says.

"The official announcement on the national campaign will be
made by President Susilo Bambang Yudhoyono in a ceremony on
Saturday," Coordinating Minister for the Economy Aburizal Bakrie
said on Wednesday.

Aburizal said 99.9 percent of the 42 million businesses across
the country were either micro, small or medium enterprises.

The government hoped the fund, which was created in line with
a United Nations-led program for small businesses, could help
reduce the poverty rate from 16.6 percent to a target of 8.2
percent and the unemployment rate from 9.7 percent to 5.1
percent.

State Minister of Cooperatives and Small and Medium
Enterprises Suryadharma Ali said small-scale businesses in the
country faced five main problems -- access to financial
institutions; a high-cost economy; lack of capacity in
technology, lack of good management and entrepreneurship; unfair
and stiff competition from larger competitors; and a lack of
industry associations.

"Therefore, the government has prepared four strategies of
developing the micro, small and medium enterprises, supporting
systems for the enterprises, empowering the businesses and
exploring the market," he said.

The campaign chairman, Bank Republik Indonesia (BRI) president
director Rudjito, said an exhibition by 170 micro, small and
medium enterprises taking part in schemes by the State Minister
of State Enterprises and regional administrations would mark the
year's official beginning.

"The campaign will be held continuously in 12 host cities," he
said.

Separately, a representative of the Indonesian Business
Development Services (BDS) in Aceh, Nuzul said that 60 fishermen
in Leupeung, Aceh Besar, and 30 snack producers in Lampaseh,
Banda Aceh, would need about Rp 40 million (US$4,331) to
reconstruct a coastal pond, which supplied their businesses.

"And they will probably also need about Rp 30 million to buy
20 small boats," he said.

Speaking at a workshop held by BDS and Save the Children,
Nuzul said many Acehnese survivors could not afford their daily
expenses because they still lived in refugee camps.

SME ministry official Muhammad Taufiq said the office had
allocated about Rp 80 billion for the redevelopment of SMEs in
Aceh alone.

"We are encouraging financial institutions to work together to
create employment in Aceh, especially in the real sector, and to
help increase the purchasing power of the local people," he said.

Taufiq also said that in an effort to help surviving SMEs,
banks should solve problems related to existing non-performing
loans.

"The central bank is studying the possibility of refinancing
SMEs, rescheduling their debts or even writing them off," he
said.

National Development Planning Board (Bappenas) deputy official
for regional autonomy Sudjana Royat urged the government and
business groups to create business opportunities for Acehnese
SMEs this year. (004)