Mar'ie wants each province to have venture capital firm

BANDUNG, West Java (JP): Each of the country's 27 provinces is expected to have a venture capital company to help finance the businesses of small firms under an equity participation scheme, Minister of Finance Mar'ie Muhammad said Saturday.

He said in a ceremony for the inauguration of PT Sarana Jabar Ventura that such venture capital companies will be an alternative source of financial support for small firms.

Sarana Jabar Ventura, established by 11 private companies and four individuals with a paid-up capital of Rp 3 billion (US$1.39 million), has a mission to help finance small companies in West Java under an equity participation scheme.

Mar'ie said the operation of such companies will promote the development of small firms which usually face limited capital and a lack of professional management.

The companies will get involved directly in the management of the businesses of their clients, he said.

According to Mar'ie, the government has arranged for equity participation up to a maximum of 10 years with hopes that during the period the client will become independent.

Mar'ie acknowledged that the management of such venture capital firms will not be easier than that of banks because small companies are always confronted with a lack of capital.

Other firms

Director for development of financial institutions at the Ministry of Finance, Bambang Subianto, said that the state-owned PT Bahana Pembinaan Usaha Indonesia actually has a similar mission in supporting the development of small businesses.

The company, with paid-up capital of Rp 22.5 billion, is 17.78 percent owned by the Ministry of Finance and 82.22 percent by Bank Indonesia, the central bank.

The government has thus far approved more than 20 companies in venture capital business but only 12 of them have are now operational.

Mar'ie said the government, under a policy announced in December 1988, has allowed foreign parties to set up joint ventures for venture capital services.

Arifin Panigoro, president of Sarana Jabar Ventura, told The Jakarta Post that at least 50 small companies have applied for financial aid from the company.

At Saturday's ceremony, Sarana Jabar Ventura signed a cooperation agreement with PT Success Co., a linen decoration producer.

M. Subechi, a director of Success Co., said his company, operating with working capital of Rp 20 million and employing 10 workers, applied for Rp 50 million from Sarana Jabar Ventura.

Success Co. produces pillows, bed pads, curtains and bed sheets. It has supplied some star-rated hotels in big cities.(fhp)