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

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)