Subdistricts to receive Rp 250m in post-flood reconstruction loans

Ahmad Junaidi, The Jakarta Post, Jakarta

Each of the city's 267 subdistricts will receive Rp 250 million (US$25,000) in soft loans to restore informal businesses and improve public infrastructure damaged by the recent floods.

Deputy governor for people's welfare Affairs Djailani said on Monday that the fund, which totaled Rp 66.8 billion was a soft loan with an interest rate of 1 percent per month.

"It should be returned. It's not a gift," Djailani told reporters after meeting chiefs of subdistricts and districts at City Hall. He added that the soft loan was given uncollateralized, with no grace period.

The annual fund, called the Subdistrict Community Empowerment Program (PPMK), would be managed by the heads of subdistricts and their councils (Dekel) and supervised by administration-appointed non-governmental organizations (NGOs).

Last year, only 25 poor subdistricts were allocated Rp 50 billion. But only 50 percent of the money (Rp 25 billion) was used.

Residents, for example, whose stalls or other small-scale economic enterprises were damaged by the floods, could request a loan with interest of 1 percent a month and could return the loan within a maximum of two years.

The amount of each loan would be decided by the chief of the subdistrict or council.

The fund is part of the Rp 251 billion package announced by City Governor Sutiyoso last week for the postflood rehabilitation program. The Rp 251 billion has been drawn from the 2002 City Budget.

Separately, head of the City People Empowerment Office Rohana Manggala, guaranteed that the fund would not be misused as it would be strictly monitored.

"The approval of loans would be signed by the chief of the subdistrict, Dekel and the NGO," Rohana said.

It is still unclear whether this year's program will be assisted by the same NGOs as last year.

The integrity of last year's choice of NGOs came into question.

NGOs that used to criticize the administration, such as the Urban Poor Consortium and the Jakarta Residents Forum (Fakta), have refused to be involved in the program.

Many residents, including neighborhood and community chiefs, in the 25 poor subdistricts were not aware of the PPMK fund last year.

Much of the fund was reportedly used to finance infrastructural construction, such as roads and public buildings, while some of the money was lent to relatives of subdistrict chiefs.

The fund would be symbolically handed over by Sutiyoso in Rawa Buaya subdistrict, East Cengkareng district, West Jakarta on Tuesday.

Besides the soft loan, the administration granted last month Rp 50 million to each of the 167 subdistricts worst hit by the floods.