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)