Kadin and Golkar launch credit guarantee fund
Kadin and Golkar launch credit guarantee fund
JAKARTA (JP): The Indonesian Chamber of Commerce and Industry
(Kadin) together with the ruling Golkar party have established a
credit guarantee fund with a planned initial paid-up capital of
Rp 50 billion (US$22.5 million).
In a presentation before government officials and business
people here on Monday evening, Kadin's Chairman Aburizal Bakrie
said the main mission of the guarantee fund, a kind of credit
insurance firm, is to spur the growth of small and medium-size
businesses.
"This guarantee fund is primarily designed to help small
businesses secure credit from banks which they often fail to do
because of their inability to fulfill administrative
requirements," Aburizal explained.
When Kadin and Golkar put forward the initial plan to
establish the guarantee fund early last year, it instantly
sparked debate among policy makers and economists.
The opposing economists, including Kwik Kian Gie and
Christianto Wibisono, claim that the fund is politically
motivated and beneficial only to the ruling party.
The opposing ministers, including Minister of Finance Mar'ie
Muhammad and Minister of Cooperatives and Small Enterprises
Subiakto Tjakrawerdaya, believe that it is better to improve the
function and performance of existing institutions like the
Cooperatives' Credit Guarantee Fund (Perum PKB), the state-owned
Indonesian Credit Insurance Company (Askrindo) and Venture
capital company, PT Bahana.
Aburizal asserted on Monday night that the guarantee fund will
not undermine the existing similar institutions but will work
hand-in-hand to help small and medium enterprises. He argued that
a number of countries, such as Thailand, the Philippines and
South Korea, have more than one credit guarantee fund. And Japan
alone has 52 guarantee funds.
Endorsement
At the presentation, however, Minister Subiakto endorsed the
new guarantee fund, saying that the government has no reason to
object to the formation of such an institution with a mission to
help small companies.
Also on hand at the presentation were Golkar Chairman Harmoko,
who is also the information minister, business tycoons Eka Tjipta
Widjaja, Sudwikatmono and A.A. Baramuli.
Aburizal declined to mention how many people will become
shareholders in the guarantee fund, confirming only that Kadin
Foundation and the Golkar Foundation would be the principle
shareholders.
"Besides individuals, we expect that a number of other
foundations and banks will join us," Aburizal said.
Muchtar Mandala, chairman of a special team formed by Kadin
and Golkar to spearhead the establishment of the guarantee fund,
explained that to secure the operation, the fund will operate as
a limited liability company and will be "profit-oriented".
He explained that the fund's sources of income include
interest earned on bank deposits as well as commission, arranger
and consultation fees from its client companies. Funding also
came from banks using its service for selecting small companies
as customers. (rid)