YDBA, PUPUK join hands to help SMEs
Sandy Darmosumarto, The Jakarta Post, Jakarta
The Dharma Bhakti Astra Foundation (YDBA) and non-governmental organization PUPUK have agreed to cooperate on the implementation of a US$22 million program financed by international lenders to help small- and medium-sized enterprises (SME) in eastern Indonesia.
It will be called the Program for Eastern Indonesia SME Assistance (PENSA), and was officially launched in September by the International Finance Corporation (IFC) and the Indonesian government. IFC is the financial arm of the World Bank.
Under the memorandum of understanding signed on Tuesday, the joint venture, Mitra Pengembangan Bisnis, will help business development service providers with consultancy and training of SMEs in the region.
YDBA is a foundation affiliated with car distributor Astra International, while PUPUK is an NGO in Bandung long active in training of small-scale entrepreneurs.
"Our aim is to encourage and support business service providers to increase their consulting capabilities with small business owners," said YDBA manager M. Kosasih.
IFC has sponsored similar programs in many other countries, but the organization usually gives the funds directly to the business service providers.
"IFC will provide technical assistance and know-how directly to the business service providers themselves. Our revolutionary approach is to work with the trainer that will train these providers," said Chris Richards, the general manager of Indonesian Enterprise Development Facility with the IFC.
"It is an approach towards increasing sustainability, so when the project ends ... there is a system in place here that can continue to work with service providers, continue to strengthen them, and continue to improve the market place for Indonesian businesses," added Richards.
According to Richards, there are 15 million unregistered businesses, mostly very small firms, in Indonesia, employing approximately 60 percent of the country's labor force.
Initially, PENSA will focus on the handicraft and furniture sectors because SMEs dominate the sector.
The program aims to improve SMEs' services, production techniques, marketing skills and management.
Cofunded by the IFC and the governments of Australia, Canada, Japan, Switzerland and the Netherlands, a total of US$22 million in technical assistance and training will be provided over a five-year period for PENSA.