YDBA, PUPUK join hands to help SMEs

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.