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Jakarta Post

Jamkrida to help SMEs develop business through loan guarantees

The Jakarta administration has launched city-owned lender PT Penjamin Kredit Daerah Jakarta (Jamkrida) in order to ease the provision of credit for small and medium enterprises (SMEs), including street vendors, which are usually not bankable

Corry Elyda (The Jakarta Post)
Jakarta
Sat, August 29, 2015

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Jamkrida to help SMEs develop business through loan guarantees

T

he Jakarta administration has launched city-owned lender PT Penjamin Kredit Daerah Jakarta (Jamkrida) in order to ease the provision of credit for small and medium enterprises (SMEs), including street vendors, which are usually not bankable.

Jamkrida president director Chusnul Ma'€™arif said during the launch ceremony at City Hall on Friday that 95 percent of the company'€™s shares were owned by the Jakarta administration, while the remaining 5 percent belonged to city-owned market operator PD Pasar Jaya.

'€œWe received Rp 400 billion [US$28.4 million] of initial capital and Rp 100 billion of paid-up capital,'€ he said.

Chusnul said that with the paid-up capital of Rp 100 billion, the company was able to guarantee total loans of Rp 1 trillion for productive SMEs.

'€œIf one enterprise borrows Rp 25 million, we can guarantee 40,000 other enterprises,'€ he said, adding that the 40,000 businesses could potentially employ 120,000 workers.

Chusnul said that he hoped that the company could cooperate well with city-owned Bank DKI, which will provide the loans. He added that if Bank DKI considered the applicants had promising businesses but were not bankable, the bank would contact Jamkrida, so the company could guarantee the loans.

'€œWe also hope that we can work side by side with other city-owned companies, so SMEs in Jakarta can develop their businesses and eventually help to accelerate our economic development,'€ he said.

Chusnul said the company would also assist the Cooperatives, Micro, Small and Medium Enterprises and Trade (KUMKMP) Agency that currently handled these enterprises.

Jakarta Governor Basuki '€œAhok'€ Tjahaja Purnama said small enterprises like street vendors actually had strong financial capabilities. '€œThe amount of illegal levies they pay to subdistrict officials, Public Order Agency officials and local gangs can be greater than the rent in a shopping center,'€ he said.

However, he added that the business owners simply did not have legal guarantees, so they could not seek bank loans.

Ahok said he previously had allocated Rp 400 billion for the KUMKMP Agency but it could not channel it as the business units did not have legal guarantees. '€œWe hope Jamkrida can become the guarantors, so we can help them,'€ he said.

Ahok said he was not afraid of giving loans to SMEs like street vendors as long as they had bank accounts. '€œHaving a bank account means that their data is recorded in the bank. If they do not want to repay their loans, we can charge them under the Banking Law, which has more severe punishments,'€ he said.

KUMKMP Agency head Irwandi said 15,000 out of 600,000 street vendors and small and medium enterprises had bank accounts at Bank DKI. '€œHence, around 15,000 are eligible for loans from Bank DKI,'€ he said, adding that the bank would determine whether they were eligible for loans.

Irwandi said his agency would keep trying to intensify listing the enterprises and vendors, so more businesses would be registered.

The Financial Services Authority'€™s (OJK) executive head for non-banking financial institutions, Firdaus Djaelani, who attended the ceremony, said that Jamkrida was essential for the development of SMEs. '€œThese businesses actually have a big impact in our country. They had a major role in helping us survive during two economic crises,'€ he said.

However, he added, the enterprises had limited means to develop their businesses as they were not bankable. '€œThey are not legal entities and they also do not have assets of adequate value that can be used as security for bank loans,'€ he said.

Firdaus said that according to Bank Indonesia, only 18 percent of SMEs in the country could access bank loans. '€œThis is relatively small if we compare it with the number of SMEs in Indonesia, which amounts to almost 56 million,'€ he said.

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