PEAC Jakarta unit launched to boost SME financing access
The Jakarta Post, Jakarta
In an effort to help develop and empower small-to medium- sized enterprises (SMEs), a Jakarta unit of an agency designed to promote SMEs's access to financing was launched on Thursday.
The launch of the agency, named Promoting Enterprise Access to Credit (PEAC), followed the setting up of a similar agency in Surabaya in December.
PEAC is jointly sponsored by Swiss Foundation for Technical Cooperation (Swisscontact) and the Eastern Indonesia Small and Medium-sized Enterprise Development (PENSA) -- an affiliation with the World Bank's private arm, the International Finance Corporation (IFC).
"The existence of PEAC is to provide a (financing) bridge to SMEs," said Swisscontact's resident representative, Peter Bissegger.
The Jakarta unit is expected to help SMEs at district level in the greater Jakarta area gain and extend access to financing or credits. The services provided by the agency focus on consultancy -- aimed at enhancing the knowledge of banking products among SMEs starting from the very basic skills such as filling in lending applications as well as helping prepare them to meet credit requirements.
On Thursday, officials from the Swisscontact and PENSA met with 40 prospective investors, mostly banks, which will soon be shortlisted to just one investor who would then become the sole financing provider for PEAC Jakarta.
The prospective investors, both individuals and institutions, must complete several stages of a strict selection process before being named the winner.
Bissegger said the minimum requirements for prospective investors were experience with SMEs, a clear business plan, sound financial statements, and the ability to invest Rp 150 million (US$16,375) to jump-start the program.
According to Hal Bosher, the development officer for IFC, PENSA and the central bank would take part in the selection of the investor.
Bank Indonesia data shows that as of the third quarter of last year, bank loans to SMEs reached Rp 50.8 trillion, surpassing the central bank's previous estimation of Rp 38.5 trillion.
SMEs form one of the country's strategic sectors due to their huge impact on the economy. The SME sector, which is more resilient than other sectors, employs about 37 million people, or 37 percent of the country's workforce.
The sector was among the few in the country that was not significantly affected by the financial crisis. (004)