Most SMEs not reliant on bank loans: Survey

Most SMEs not reliant on bank loans: Survey

JAKARTA (JP): Most small and medium-sized enterprises (SMEs)
still rely on traditional sources to finance their activities,
according to a survey conducted by Akatiga, a rural business
surveying agency.

Akatiga, which focuses its research activities on the
development of SMEs, said most SME owners use their own money or
that borrowed from relatives or friends to support their
businesses.

The agency's survey issued on Tuesday shows that only 1.2
percent of 320 respondents had used bank loans. However, it found
out that most of them were able to survive despite the absence of
the bank loans.

The respondents in the survey, which was financed by the
Manila-based Asian Development Bank (ADB) and conducted in
cooperation with the Asia Foundation, operate in Bali, Central
Java, Yogyakarta, West Sumatra and South Sulawesi. The companies
are mostly involved in garment and furniture manufacture, food
production and the service industry.

"Although the companies are able to survive without bank
loans, their future expansion will be very limited," Erna E.
Chotim, a senior executive of the agency, said.

She called on the government to come up with more concrete
action to help the companies because existing policies had failed
to help them.

She cited that many international agencies had provided loans
to support the country's SMEs but there were no records showing
where the funds were directed.

ADB approved early this year loans amounting to US$200 million
to finance a program of a far-reaching policy reforms to
deregulate and liberalize Indonesian industry. The main target of
the program is to create business opportunities for the SMEs.(02)