Subdistrict support funds in pipeline
Damar Harsanto, The Jakarta Post, Jakarta
The Jakarta Community Empowerment Board (BPM) revealed on Wednesday that 267 subdistricts would receive the Subdistrict Residents Empowerment Scheme fund (PPMK) soon, saying that it is ready to disburse a total of Rp 267 billion this year.
"The subdistricts will receive different amounts of money based on their respective proposals. The amounts range from Rp 850 million to Rp 1.6 billion," BPM head Yusuf Effendy Pohan said.
The fund could be used to finance the development of infrastructure in the subdistricts, empower small-scale entrepreneurs through loans and give social assistance to the residents.
Yusuf admitted that part of the fund being channeled to small- scale entrepreneurs through revolving loans in previous years had turned into bad debts.
"There are several reasons as to why the loans turned into bad debts, such as the debtors passing away, moving to an unknown address, their business going bankrupt and the debtors' unwillingness to pay off their obligations. The main reason is debtors' reluctance, which accounts for 16.8 percent of the bad debts."
BPM's data made available to The Jakarta Post shows that 23 percent of the total fund of Rp 56.8 billion being channeled to 92,228 debtors in 242 subdistricts across the capital in 2002, or Rp 18.1 billion, had turned into non-performing loans.
In 2003, the bad debts could be reduced to 15 percent, or Rp 12.6 billion, from the total outstanding debts of Rp 83.3 billion involving 64,357 recipients.
"We have not yet received a report on the use of last year's fund," Yusuf said.
Meanwhile, city spokesman Catur Laswanto said that Governor Sutiyoso had instructed the BPM to punish bad debtors.
"If necessary, the board could bring the case to the police to deter disobedient debtors," Catur quoted Sutiyoso as saying.
The administration was also looking into the possibility of assigning professional financial consultants to help the subdistrict council members manage the fund in more transparent and accountable ways.
"The governor wants a thorough audit and evaluation of the entire PPMK program given that the term of the subdistrict council members will last in April next year," he told the Post.
The PPMK was initially launched in 2001 in 25 subdistricts, each receiving Rp 2 billion in funds. The program was then expanded to all 267 subdistricts in the city in 2002 with each subdistrict receiving Rp 250 million. The administration gradually increased the fund per subdistrict to Rp 500 million in 2003 and Rp 750 million in 2004.
In 2003, two members of the subdistrict council (Dekel) in Serdang, Kemayoran district, Central Jakarta, who were in charge of channeling the fund, were sent to jail for misusing Rp 700 million of the funds.
Despite irregularities in the implementation of the scheme, Sutiyoso insisted on maintaining the program. "The benefit of the revolving funds is that residents get easy access to fresh cash to develop their businesses."