Venture capital companies lack project funds
Venture capital companies lack project funds
JAKARTA (JP): Venture capital companies in West Java,
Yogyakarta and Bali are short of capital to finance venture
projects in the three provinces.
Executives of the venture capitals told a hearing with
Commission VII of the House of Representatives here yesterday
that they are only able to finance less than half of the proposed
projects due to the capital shortage.
Yani Rodyat, the president of the Bandung-based PT Sarana
Jabar Ventura, said that the venture capital company received
partnership proposals from 658 small-scale companies in the last
two years, with funding requirements amounting to around Rp 38
billion (US$16.5 million).
"The venture capital, however, is capable of financing only 68
of the proposed projects, worth around Rp 2.02 billion," Yani
told the commission, which oversees banking, multifinance,
insurance, trade and cooperatives.
Executives of the Yogyakarta and Bali venture capitals said
that the shortage of funds is also the main problem in developing
the venture capital industry in the provinces.
Amelia A. Yani, the president of PT Sarana Yogyakarta Ventura,
said that the Yogyakarta-based venture capital received financing
proposals worth Rp 20.32 billion from 169 small-scale companies
since its establishment in November 1994.
"But we are able to finance only 48 projects worth Rp 1.77
billion," said Amelia, the daughter of the late General Achmad
Yani.
PT Sarana Bali Ventura's president, I Wayan Ramandha, told the
House members that the Bali-based capital venture, established in
1994 with a paid-up capital of Rp 3.69 billion, faced
difficulties in meeting the funding demands from small-companies
in the province.
The capital venture has provided an equity participation of Rp
1.14 billion to 18 small-scale companies in Bali since its
establishment.
"The approvals were only a small part of 52 projects worth Rp
8.4 billion proposed during the company's operation," he said.
The executives of the three venture capitals acknowledged that
the financing proposals were rejected not only due to their weak
financial capability, but because many proposed projects were not
feasible.
The three venture capitals were part of 19 venture capitals
established in the provincial capitals since 1994. Other venture
companies are located in Surabaya and other important cities in
Sumatra, Kalimantan and Sulawesi.
The establishment of the venture capitals was sponsored by PT
Bahana Artha Ventura, the state-owned venture capital, which
injected Rp 1 billion as an equity participation into each
venture capital firm.
Hafiz Arief, the president of Bahana Artha Ventura, said that
four more venture capitals would be established in the next few
months.
He said that besides providing an equity, the state-owned
venture capital also provides management and marketing training
to executives of the provincial venture capitals.
"Such training is essential because the provincial venture
capitals would also be responsible for improving the management
of their business partners," he told the House members. (hen)