SMEs to flourish, thrive: Agency

The East Java agency for small and medium enterprises (SMEs) and cooperatives says SMEs will continue to grow despite the economic downturn, and will enjoy good prospects once the downturn is over.

Agency head Bramansetyo expressed confidence that this particular category of enterprises would enjoy good prospect once the crisis was over, especially because it had a loyal albeit small market.

"As far as I can see, SMEs can depend on these captive markets, which will keep offering good business opportunities, especially once the global economic crisis is over," Bramansetyo said.

He added when that time came, SMEs would be able to expand their business.

Bramansetyo said his office had also prepared a set of courses for local residents with an interest in running an SME in the province, aimed at increasing their business skills.

"We also have courses for those who're just starting up a small or medium business," he said.

"We're running the courses in cooperation with other institutions."

Totok Indarto, head of the agency's SME marketing development section, said his office expected more than 1 million new SMEs would emerge across East Java by the end of the year.

This, he said, would indicate an upturn in the development of SMEs, as shown by the people's enthusiasm for running their own business on a small scale.

"We've seen this trend play out over the last three years," Totok said.

As of September this year, he added, there were already 900,000 new SMEs up and running in East Java.

To support the development of SMEs, Totok said, the government had allocated soft loans mainly for the expansion of small and medium businesses.

"We received Rp 1.2 billion from the government, all of which will be allocated to support the development of SMEs," he said.

"We hope they all get to benefit from the loans."

He added there were at least three SME program developments implemented in the province, including the Local Economic Development Partnership (KPEL), New Enterprises (WUB) and the SME Development Center.

Soft loans for KPEL programs, Totok said, topped out at Rp 150 million, while for WUB programs they ranged from Rp 10 million to Rp 16 million.

Totok said loans were disbursed through local administrations, and not directly given to the SME, with an interest of 6 percent and an installment period of up to two years.

"The programs work in sync with the provincial administration's economic development program," he said.