US$2.9b in loans pledged for small, medium firms

JAKARTA (JP): Big businesses within the Jimbaran group will set aside about Rp 7 trillion (US$2.92 billion) in working capital loans and technical assistance this year to support small and medium enterprises (SMEs).

Businessman Sudwikatmono, one of the group's founders, said yesterday this was about twice the amount the group had managed to set aside for the partnership program last year.

"We aim to achieve twice the amount we did last year," he said in a press conference.

Sudwikatmono said that when the Jimbaran group formally launched its program last year, 44 of its members pledged to assist 99,642 SMEs and cooperatives. The amount of short-term loans they committed to the partnership program that year was Rp 2.9 trillion.

"But it turned out that, as of May 13, all 48 members of the Jimbaran group had managed to allocate Rp 3.58 trillion for 132,765 SMEs and 1,588 cooperatives. So we have passed our target," he said.

Minister of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya said yesterday that ever since the government urged big businesses to establish partnerships with SMEs last year, 633 large businesses had pledged to allocate a total of Rp 6 trillion in loans and technical assistance for partnership programs with 264,850 SMEs and cooperatives.

The Jimbaran group, the Coordinating Body for the Implementation of National Business Partnership Program group and several national and local-level state-owned firms coordinated with the businesses.

As of May 13, however, only 65 percent of the amount, or Rp 3.94 trillion, had been disbursed, he said.

The Jimbaran group consists of 48 tycoons who met in Jimbaran, Bali, almost two years ago to work out programs of action to help SMEs and eradicate poverty.

Meanwhile, the Coordinating Body for the Implementation of National Business Partnership Program group was established with similar goals in January. It consists of 79 local businesses.

Sudwikatmono predicted it would take at least 10 years for the country's 34 million SMEs to be covered by partnership programs.

He said the number of large businesses that could, and should, establish partnerships with SMEs and cooperatives could still be increased.

"Several big businesses are not aware of the need for partnerships, so we have to keep motivating them and make gentle approaches," said Sudwikatmono, a brother-in-law of President Soeharto.

He said some big businesses had not joined hands with SMEs due to financial problems but "others are either not fully committed or just ignore the need for partnership".

Businessman Sofyan Wanandi, another founder of the Jimbaran group, said that in some cases the leaders of business groups were committed to the idea of partnership, but their company professionals were not.

"Similarly, some local administrations might also not be responsive to the programs," he said.

Subiakto said that though many big businesses had not established partnership programs, the government had no plan to make the programs compulsory.

He said it would be difficult to monitor and enforce such rules.

"What's important is for big businesses to have awareness ... It is also more efficient not to have rules because enforcing them would pose a problem," he said.

Sofyan said yesterday businesses would report their progress in the partnership programs at a national convention on business partnerships scheduled for today.

The convention, which President Soeharto is scheduled to open, is to be held at the Bogor Presidential Palace in West Java and attended by big businessmen and their cooperative and SME partners. (pwn)