Jamsostek prepares Rp 22.5 billion for SMEs

Ridwan Max Sijabat, Jakarta

State-owned insurance company PT Jamsostek has prepared Rp 22.5 billion (US$2.6 million) in credits and training funds for small and medium enterprises (SMEs) this year to support the government's program of empowering the types of businesses.

Jamsostek's president Achmad Junaidi said he just received an instruction from the government odering all state-owned companies, including Jamsostek, to deposit a part of their annual profit in banks as collateral to back up the credit scheme.

"In line with the instruction, Jamsostek has decided to put aside Rp 22.5 billion from its 2003 profit to support the program.

"Of the amount, Rp 18 billion will be disbursed in credits to a total of 600 SMEs with the annual interest rates of between 6 and 12 percent while the remaining Rp 4.5 billion will be used to cover up a training program for new entrepreneurs," he said after giving scholarships to students from law-income families at the Jakarta Fair Ground in Kemayoran on Friday.

So far, Jamsostek has provided scholarships to more than 25,000 talented children of low-income workers.

Junaidi said Jamsostek would gave priority to dismissed workers in its credit program with the goal of enabling them to continue supporting their family.

"It is line with Jamsostek's main mission of providing social security for workers," he said.

Coordinating Minister of the Economy Dorodjatun Kuntjoro-Jakti revealed on Thursday that the government has prepared a scheme to channel excess liquidity in the banking sector to SMEs and has asked state-owned companies to fully support the credit scheme.

Despite the falling interest rate of the central bank, local banks remain reluctant to give credits to the business sector partly because of the slow progress in corporate restructuring, causing a surplus in their liquidity.

Junaidi said Jamsostek had channelled a total of Rp 61.5 billion in credits to more than 3,500 SMEs nationwide since 1991.

"We usually give priorities to SMEs involving in home industry, trade, agriculture and plantation. This fiscal year, we will give more attention to dismissed workers and their relatives," he said.