Kadin's guarantee fund to operate soon

JAKARTA (JP): Indonesian Chamber of Commerce and Industry Chairman Aburizal Bakrie said yesterday that the chamber's credit guarantee fund, which is intended to spur the growth of smaller businesses, is likely to commence operations next month.

"This guarantee fund is one of the alternatives in helping to solve the problems faced by small enterprises, since they mostly do not have enough collateral to get bank loans," Aburizal said in Banjarmasin, South Kalimantan.

He said the fund would guarantee bank loans to small businesses of between Rp 50 million (US$22,000) and Rp 250 million.

The government announced recently that it will soon allow state banks to extend collateral-free loans of up to Rp 50 million to small enterprises.

The guarantee fund, a kind of credit insurance firm, was jointly established by the chamber of commerce and the ruling Golkar party last May, with an initial paid-up capital of Rp 50 billion.

Aburizal said that, if necessary, a number of big businesses are willing to contribute to the fund.

"The creation of this fund shows that big enterprises really want to nurture the growth of small and medium-sized businesses," Aburizal said.

He said that the fund would operate as a limited liability company and would be "profit-oriented." (rid)