E

xperts have voiced concerns over the city administration’s plan to issue a gubernatorial decree on its entrepreneurship program, which might overlap with existing regulations.

Jakarta Deputy Governor Sandiaga Uno said that in a new regulation on the One District One
Center of Entrepreneurship (OK OCE) program, the administration would allow participants to get home-based business permits to help the entrepreneurs to get bank loans.

According to existing regulations, a business permit may only be granted to an enterprise in an approved area outside residential areas, according to Jakarta Bylaw No. 1/2014 on spatial planning.

Public policy expert Agus Pambagio said the administration should revise the bylaw before issuing the new regulation to prevent conflicting regulations.

“Besides, the administration’s supervision system does not operate well. Even though it has been regulated with the bylaw, the implementation is also poor,” Agus told The Jakarta Post.

He added that overlapping regulations would add a greater mess to the city’s spatial planning.

With the fact that many residents rely on the informal sector, home-based businesses are unavoidable, even though it is considered illegal if it is done in residential areas.

No punishments or warnings are given, as long as residents in the area do not object to the business.

Jakarta Cooperatives, Small and Medium Enterprises and Trade Agency head Irwandi said the decree would help the OK OCE entrepreneurs who want to apply for a loan to start their business.

“If prospective entrepreneurs face difficulty getting the permit, just join OK OCE,” Irwandi said on Sunday.

He hoped that the decree, which has been submitted to Jakarta Governor Anies Baswedan for approval, could be issued this month.

Regarding the bylaw on spatial planning, Irwandi said it would be proposed for revision. However, the new regulation should not wait for the bylaw’s revision because it is to improve the operations of prospective entrepreneurs joining the program.

Irwandi argued that Presidential Decree No. 98/2014 on licenses for micro and small enterprises stipulated that small and medium enterprises (SMEs) should be able to get their business permits in a simple way to boost the economy.

Later on, the gubernatorial decree will only allow OK OCE members who have a maximum of 19 employees to start a home business. Their place of business can be a maximum of 400 square meters and a minimum of 60 sqm.

So far, the agency recorded 25,000 residents who have joined the program.

Separately, Gadjah Mada University SME expert Hempri Suyatna also voiced similar concerns that the decree could overlap the prevailing bylaw.

“The city administration should not rush to issue the decree, and although it aims for the [program’s] operation, do not break any prevailing regulation,” Hempri said.

He added that the agency should have a tight selection process, especially with the assurance to ease the permit, as many people will likely join the program.

“OK OCE should not only target to recruit plenty of people but also see the number of SMEs that can upgrade their business, like from micro to medium, and this has yet to be seen,” Hempri said.

If in the end OK OCE only targets to recruit more people, it might be seen as a mobilization program.

Furthermore, Sandiaga earlier announced that city-owned lender Bank DKI had agreed to provide loans with a low interest rate of 7 percent to OK OCE members.

Bank DKI is scheduled to give loans to 70 OK OCE participants on April 23.