Kadin and Golkar to form guarantee fund next year

JAKARTA (JP): After a long debate, the Indonesian Chamber of Commerce and Industry (Kadin) together with the ruling Golkar party eventually decided to establish a guarantee fund early next year to spur the growth of small businesses, an executive says.

Kadin Chairman Aburizal Bakrie told newsmen yesterday that the establishment of the guarantee fund, a kind of credit insurance firm, has endorsement from President Soeharto.

"In his address at the opening of the 21st International Small Business Congress here last week, Soeharto supported the idea of establishing a guarantee fund," Aburizal said at a press conference after attending the meeting with Kadin's board of executives yesterday.

Aburizal said within the next three months, a special team set up by Kadin and Golkar will working out the technical aspects of establishing the guarantee fund. "Then for sure we will make it come true by the end of this year," he said.

The idea of creating a guarantee fund has sparked debates among economists and policy makers since it was put forward for the first time by entrepreneurs in the Golkar party last May.

Kadin and Governor of Bank Indonesia J. Soedrajad Djiwandono are among those who support it. They said such a guarantee fund is necessary as small businessmen often cannot fulfill administrative requirements to get credit from a bank.

Opposition

Those opposing it are, among others, Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya, Director of the Indonesian Business Data Center Christianto Wibisono and economist Kwik Kian Gie.

Subiakto disagreed with a new guarantee fund because there have been similar institutions, such as the state-owned Indonesian Credit Insurer (Askrindo) and Perum PKK, another state-owned company for the development of cooperatives. He said it is better to maximize the existing institutions rather than establishing a new guarantee fund.

Cristianto and Kwik are more skeptical. They said it will only benefit the ruling party, particularly if the source of the proposed guarantee fund is obtained from state firms' profits.

Aburizal, however, argued that the source of the guarantee fund will not be taken from the state firms' profits, but from the public.

"Whoever wants to take part, just please do... Also state- owned companies, if they want to take part, they may become the fund's shareholders," Aburizal assured.

He said the planned guarantee fund is more than just a credit insurance firm as it will not merely make loans easier for small enterprises but also teach them how to manage their firms more professionally. (rid)