New organization to help close socioeconomic gap
New organization to help close socioeconomic gap
Zakki Hakim, The Jakarta Post, Jakarta
About 500,000 small-scale entrepreneurs from 11 million poor
families across the country established a new organization on
Saturday that will seek to improve their bargaining power in
dealing with the government and financial institutions.
Called the Micro Businesses Association (AKU), the new
organization was founded mainly to preserve the gains made under
a government-sponsored poverty eradication program through
entrepreneurship, the secretary to the coordinating minister for
people's welfare, Soetedjo Yuwono, said on the sidelines of the
AKU's first national meeting.
He said the association was set up after a group of business
tycoons, who had been providing loans to small-scale
entrepreneurs since 1995, had discontinued their assistance at
the start of this year.
A group of 100 business tycoons were gathered by President
Soeharto in Jimbaran, Bali, to pledge a commitment to helping the
government close the socioeconomic gap between people in the
country. Since 1998, the funds raised from the leading
businessmen have been channeled to poor families through the Dana
Sejahtera Mandiri Foundation, which was set up by Soeharto.
The partnership program offered support in the fields of human
resources, financing, market access and market information.
The partnership agreement expired at the end of last year and
the revolving loans were recalled, leaving the emerging micro
businesses in limbo, Soetedjo said.
The AKU urged the government on Saturday to allocate at least
5 percent of the Rp 40 trillion (US$4.49 billion) in state funds
earmarked for the poverty alleviation program this year to micro
enterprises at an interest rate of 6 percent per year.
"Conventional banks tend to be reluctant to finance small-
scale enterprises, let alone micro businesses. We, therefore,
will lobby the government to encourage financial institutions to
extend facilities to micro businesses." newly-elected AKU
chairman Imam Hariyadi said.
Developing micro businesses is one of the ways to eradicate
poverty in the country, said Imam, who is also a deputy to the
chairman of the National Family Planning Board (BKKBN).
Sulistiowati, a housewife from the East Java town of Jember
who has participated in the micro business program for the last
five years, said the program had helped her and many other poor
families in her community.
"Currently from my handicraft business, I can earn at least Rp
1 million net per month," she said.
Five years ago, she received a Rp 500,000 loan from the
program, which she repaid over one year at an interest rate of 5
percent.
"We hope the association can lobby the government to
prioritize people like us in the national campaign against
poverty," she said.
The association has recruited 40 percent of its executives
from the BKKBN given their access to government circles.