New credit guarantee fund inaugurated

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)