New credit guarantee fund inaugurated
JAKARTA (JP): The Indonesian Chamber of Commerce and Industry (Kadin), in cooperation with the ruling Golkar party, inaugurated a credit guarantee fund company last night to help spur the growth of small businesses.
At a ceremony at the Hilton hotel, the guarantee fund company, named PT Penjamin Kredit Pengusaha Indonesia, was set up with an initial paid-up capital of Rp 6.16 billion (US$2.7 million), far below the original target of Rp 50 billion.
Kadin Chairman Aburizal Bakrie told journalists after signing a notary deed establishing the company that, by early next year, the company is expected to have accumulated a total paid-up capital of Rp 30 billion.
He said a number of big businesses have committed themselves to contributing to the fund but have yet to make good on their commitments.
Thirty-one noted figures and big businesses participated in the establishment of the fund. Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya, PT Bakrie Investindo, and business tycoons Eka Tjipta Widjaja and Sudwikatmono helped strengthen the fund's capital by contributing Rp 1 billion each.
Aburizal said recently that the guarantee fund, a kind of credit insurance firm, will guarantee bank loans to small firms of between Rp 50 million (US$22,000) and Rp 250 million.
The government announced recently that it will allow state- owned banks to extend collateral-free loans of up to Rp 50 million to small enterprises.
"Our target is for this fund to be able to guarantee a total of Rp 15 trillion of credit extended to small businesses," Aburizal said.
Businessman Fahmi Idris, who is an executive of both Kadin and Golkar, said that the fund will not discriminate against small businesses on the basis of their political allegiances.
"As long as their businesses are worth receiving credit and they need our guarantee, we will extend our help," Fahmi said, adding that, with an initial paid-up capital of Rp 6.16 billion, the fund will be able to guarantee credit extended to at least 20 small firms.
Fahmi said that the fund would operate as a limited liability company and would be "profit-oriented."
The fund's sources of income will include interest earned on bank deposits as well as commission fees, arranger fees and consultation fees from its client companies. Funding will also come from banks using its service for selecting small companies as customers.
On hand at last night's ceremony were Coordinating Minister for Industry and Trade Hartarto, State Minister of Population/Chairman of the National Family Planning Board Haryono Suyono, Minister of Mines and Energy I.B. Sudjana, Minister of Tourism, Post and Telecommunications Joop Ave and State Minister of Sports and Youth Affairs Hayono Isman.
Speaking at the ceremony, which coincided with the 27th anniversary of Kadin, Aburizal called for the abolition of monopolies, oligopolies and cartel-like practices in order to help spur the growth of small businesses.
He noted that Kadin welcomes any party's efforts to help small businesses, including those announced by the country's most influential business tycoons in Bali last August.
"Kadin fully supports the (Bali) move... However, that doesn't mean that Kadin tolerates monopoly, oligopoly and cartel-like practices," Aburizal said.
He added that the partnership between large and small companies currently being pursued by all parties, including the government, should not be allowed to hinder the elimination of such practices. (kod/rid)