Small business get bank credits of Rp 31t

JAKARTA (JP): Governor of Bank Indonesia J. Soedradjad Djiwandono said here yesterday that credits extended by banks to small businesses as of June reached Rp 31 trillion (US$14.3 billion) or 26 percent of their total credits.

John D. Conroy, the executive director of the Foundation for Development Cooperation, meanwhile, said that Indonesia is the most successful country in Asia in implementing the project of Linking Banks and Self-Help Groups (PHBK).

Speaking to participants of a workshop on banking with the poor, Soedradjad said that the credits extended to small businesses had already exceeded the government-set target of 20 percent.

Soedradjad said that 43 percent of the credits extended to small businesses went to borrowers with a credit ceiling of Rp 25 million in five million credit accounts, representing 95 percent of the total accounts of credit facilities for small businesses.

He admitted that the public still considers it difficult for small businesses to have access to banking credits, while large firms have better access.

"The statistical figures actually show that small businesses now have improved access to credit," he said.

He added that the extension of credits to small businesses grew by an average of 20 percent per annum during the last five years.

According to Soedradjad, 3,000 potential small scale projects were identified as ineligible for credit facilities as of June. Of those 3000 almost 1,500 have already received total loans of Rp 500 billion from 72 banks.

Conroy said that the three day workshop, which is sponsored by the central bank and the Foundation for Development Cooperation, was trying to search for the best way to extend credits to small businesses in Indonesia.

Soedradjad said the PHBK program has been successful in increasing villager access to bank credit.(05)