Low-interest loans to poor will be paid by January

Low-interest loans to poor will be paid by January

PALU, Central Sulawesi (JP): The government hopes to complete
by next January the first stage of its new poverty alleviation
program, which involves administering low-interest loans to 12
million Indonesians for starting their own businesses.

Under a scheme called People's Prosperity Business Credit
(Kredit Usaha Kesejahteraan Rakyat, or Kukesra), families will
initially receive a modest sum of Rp 20,000 (US$8.70), which will
multiply each time it is repaid within four months.

State Minister of Population Haryono Suyono said on Tuesday
that officials have begun administering the loans.

From April to June, the first group of 5 million people will
receive the loans, said Haryono, following a ceremony here during
which he presented loans to 10 families. "By January, all of the
11.8 million people will have received the loans," he said.

President Soeharto administered a Rp 100 billion (US$44
million) loan last January to launch the program, which is now
being supervised by Haryono's office.

The program is the second initiated by the President,
following his Presidential Aid for Backward Villages (IDT)
program, which aimed at attacking poverty at its roots.

The IDT, launched in April 1994, covers areas with large
numbers of poor people. Villages not covered by the IDT program
will have access to the Kukesra program.

Government figures show that as many as 26 million Indonesians
are currently living below the official poverty line.

The Kukesra program is an extension of the government's
People's Prosperity Savings campaign, which was designed to
encourage poor people to take up the habit of saving money.

Selected Takesra participants must have savings of at least Rp
2,000 to qualify for an initial loan of Rp 20,000.

The borrowers must repay the loan within four months, and
strive to double their savings during that period to Rp 4,000.

During the second round, they will be entitled to loans
amounting to Rp 40,000. The credit ceiling will gradually
increase in line with the growth of their business.

"By May 2,000, all of them are expected to receive the fifth
stage of the loan, which is Rp 360,000. They can repay it within
a year," Haryono said.

The government has appointed Bank BNI 46 to handle the loans.
The bank will work with PT Pos Indonesia -- the state post office
company -- whose branches in nearly every village in the country
position it perfectly to distribute the funds. (31)