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icro, small and medium enterprises are to receive a boon under government plans to simplify licensing procedures that will give them access to legal protection and easier finance.

Coordinating Economic Minister Chairul Tanjung said on Wednesday that the government would soon issue a presidential decree to simplify licensing producers for small-scale companies.

'€œWe will raise this issue in a limited Cabinet meeting scheduled to take place in September. We hope to issue the decree after that,'€ he told reporters following a meeting with Cooperatives and Small and Medium Enterprises Minister Syariefuddin '€œSyarief'€ Hasan, Home Minister Gamawan Fauzi, Trade Minister Muhammad Lufti and Investment Coordinating Board (BKPM) chairman Mahendra Siregar.

Such enterprises, especially micro enterprises, have often faced legal problems due to the absence of a valid business permit. Under the new licensing procedure, small- and medium-scale entrepreneurs can apply for the permit at regency offices by submitting copies of their e-KTP electronic identity cards and tax number (NPWP).

'€œBut micro entrepreneurs need only show their e-KTP. They can take it to the nearest district office to apply for the permit. In some areas, the service is also available at the subdistrict office,'€ he said.

According to Law No. 20/2008, a micro enterprise is categorized as a business with a maximum net worth of Rp 50 million (US$4,271) or a maximum annual turnover of Rp 300 million.

A small enterprise is listed as a business with a maximum net worth of between Rp 50 million and Rp 500 million, or an annual turnover of Rp 300 million to Rp 2.5 billion; and a medium enterprise as a business with a net worth of Rp 500 million to Rp 10 billion, or an annual turnover from Rp 2.5 billion to Rp 50 billion.

At the moment, the number of micro, small and medium enterprises reaches more than 56 million units, 650,000 units and 50,000 units, respectively.

Chairul claimed that the entrepreneurs would be charged nothing, with all expenses met by the state and regional budgets.

The ministers also reached an agreement to streamline the licensing procedures at all ministries and to appoint Mahendra as coordinator of the simplification process.

Past data from the BKPM show that the licensing process could take 886 days in the agricultural sector, 794 days in the industrial sector and 744 days in the transportation
sector.

Mahendra said that bottlenecks currently existed in various licensing processes, such as those to acquire environmental impact analysis (Amdal) and building permit (IMB) approvals.

'€œWe are going to lay out detailed and concrete plans to solve them. We may eliminate some requirements that are no longer relevant,'€ he said.

The results will be presented to the President in the same limited Cabinet meeting in September.

Djarot Kusumayakti, the director of micro, small and medium enterprises at Bank Rakyat Indonesia (BRI), said that the state-owned lender welcomed the initiative.

At present, BRI asks micro-entrepreneurs who apply for a loan to furnish a letter from a local village head or market head confirming that the applicant runs a business in the area. '€œThis helps for now, but it will be great if these entrepreneurs can obtain legal status,'€ he said.

BRI is now one of the major players in the micro loans sector, serving 6.9 million micro-customers