Venture capital firm set up in Medan to help local economy
MEDAN, N. Sumatra (JP): Minister of Finance Mar'ie Muhammad sees venture capital financing as one of the most effective ways of enhancing the development of small and medium-scale enterprises as investors usually bring in equity funds as well as managerial and marketing skills.
"I therefore greatly welcome the incorporation of PT Sarana Sumut Ventura as the second venture capital company that is based in a provincial capital," Mar'ie noted here Friday evening.
Mar'ie was here to witness the incorporation of PT Sarana Sumut with a paid-up capital of Rp 3.75 billion (US$1.72 million) by state companies and private businessmen. It is the second venture capital company based outside Jakarta after PT Sarana Jabar Ventura in Bandung.
Mar'ie said a local venture capital company is obviously in a better position to identify small and medium-scale businesses with high growth potentials in North Sumatra that are qualified for equity financing.
He hoped that other provinces would have venture capital companies to help develop small and medium-scale enterprises, thereby strengthening and broadening the base of the business sector.
He reaffirmed the important role of small firms in generating jobs and in promoting a more equitable distribution of business opportunities.
"The government has taken several measures, including tax incentives, to encourage the operations of venture capital companies in the country," Mar'ie said.
He added the government also has allowed state companies to use part of their profits for venture capital funds.
Operating
There are now 16 venture capital companies operating in Indonesia but most of them are based in Jakarta. Of the total, seven are owned by private national businessmen and nine are joint ventures with foreign companies.
PT Sarana Sumut, which is expected to start up operations within the next few weeks, is controlled by the North Sumatra Regional Development Bank and state-owned PT Bahana Artha Ventura. The other shareholders are local businessmen such as Sukanto Tanoto, Ade Nasution, Yopie Batubara, Karim Tono Tjandra, Adi Putra Darmawan Tahir.
"We are optimistic in getting more shareholders to strengthen our venture capital financing capability," PT Sarana Sumut's President Yopie Batubara said.
Batubara saw the participation of private investors in the venture capital company as greatly helpful in seeking investee companies because they have been well experienced in dealing with small and medium-scale enterprises.(vin)