Subsidized loans from state firms on target: Official

Subsidized loans from state firms on target: Official

JAKARTA (JP): State-owned companies channeled about Rp 600
billion (US$254.2 million) in cheap loans to small and medium-
scale enterprises (SMEs) and cooperatives between 1989 and 1996,
Director General of State Companies Bacelius Ruru said yesterday.

"It's untrue that the amount is off target, though the
allocations have been reduced from 5 percent to between 1 percent
and 3 percent of state companies' net earnings, Ruru said.

Ruru was addressing a workshop and exhibition on partnerships
between state-owned enterprises and small-scale businesses and
cooperatives organized by Yayasan Dharma Bhakti Astra, a
foundation controlled by publicly-listed auto maker PT Astra
International.

In absolute terms the state companies' allocations remain
large because of their steadily increasing net profits, he said.

The 178 state companies recorded a combined pretax profit of
Rp 9.32 trillion ($3.94 billion) last year, up 20.5 percent from
1994.

Since 1989 the government has required state companies to set
aside up to 5 percent of their after-tax profits to help small-
scale businesses and cooperatives.

This year the allocation was reduced to 3 percent, because 2
percent of their after-tax profits have been allocated to Yayasan
Dana Sejahtera Mandiri foundation, which aims to help people
living below the poverty line.

The government-sponsored Dana Sejahtera foundation was set up
in January to manage donations from companies and rich people to
finance poverty alleviation programs.

The foundation's founders include President Soeharto, in a
personal capacity, businessmen Sudono Salim and Sudwikatmono and
State Minister of Population Haryono Suyono.

Companies and individuals with after-tax incomes exceeding Rp
100 million a year are required to donate 2 percent of their
incomes to the foundation.

Minister for Cooperatives and Small-Scale Enterprises Subiakto
Tjakrawerdaya announced earlier this year that around Rp 540
billion had been distributed to small-scale businesses and
cooperatives.

According to the Central Bureau of Statistics, 99.8 percent or
33.4 million of the 33.5 million businesses in Indonesia in 1994
were small enterprises, each with a turnover less than Rp 1
billion a year.

Minister Haryono said recently the Dana Sejahtera Mandiri
foundation had collected Rp 321 billion, exceeding its original
target of Rp 250 billion.

Dozens of SMEs and cooperatives are participating in the two-
day workshop and exhibition which will end today.

Several heads of small businesses complained at the workshop
that business partnerships between small and big companies did
not work if the small firms were not reserved particular market
segments.

"I understand that monopolies and oligopolies are the name of
the game in certain industries," the head of a small business
from Sidoarjo, East Java, said.

Yayasan Dharma Bhakti Astra chairwoman Rini M.S. Soewandi said
yesterday the Astra foundation had developed partnerships with
thousands of small and medium-scale enterprises and cooperatives
through subcontracting and other business links.

The Dharma Bhakti Astra foundation was set up in May 1980. The
foundation had established partnerships with 28,507 small firms
and cooperatives in 14 provinces by June this year. (icn)