Small business needs better coordination to develop

Small business needs better coordination to develop

JAKARTA (JP): Better coordination among government
institutions, banks and the Indonesian Chamber of Commerce and
Industry is needed to accelerate development of small businesses
in the country, a senior official said.

Banks, for example, can increase their cooperation with Kadin
by allowing the latter's provincial offices to guarantee the
repayment of credits owed to small businesses, Director General
for the Development of Small Enterprises Sidik Prawiranegara said
at the opening of a two-day meeting.

The meeting will discuss ways to promote the development of
small enterprises, which generally face problems related to lack
of capital, skills and market access.

Sidik said intensive discussions will be needed to formulate
concrete measures for improved cooperation among government
institutions, banks and Kadin.

He said the government has been trying to support the
development of small enterprises by allowing state firms to
allocate up to five percent of their after-tax profits for
assisting small businesses and cooperatives.

The government, under Presidential Decree No. 16/1994, also
allowed its institutions to appoint small enterprises to carry
out projects without having to take part in tenders.

The government has also required banks to allocate no less
than 20 percent of their outstanding credits for small businesses
and cooperatives.

Role

"I urge Kadin's provincial offices to play a more active role,
specifically, by providing recommendations to small enterprises
which have shown themselves to be reliable in carrying out the
projects of government institutions or state-own companies,"
Sidik added.

However, the chief of Kadin's department for small-scale
businesses, Poppy Dharsono, said that the government's efforts to
promote the development of small enterprises are frequently
hampered by officials at local administration offices.

She explained that sometimes high level government
institutions agree to award projects to small enterprises but
officials at lower-level offices oppose their decisions and hold
tenders for the projects.

Low-level government institutions sometimes delay payments for
months, causing tremendous losses to small enterprises, she said.

Poppy also said that Kadin has provided consulting services
for small businesses through its "Rumah Indonesia", which has
thus far trained 350 consultants from several provinces.

The consultants work in provinces with monthly salaries of Rp
150,000 (about US$70), of which two thirds are provided by the
Ministry of Manpower and the remainder by Kadin. (yns)