Kadin Ask President to Pay More Attention to Small Businesses

KADIN ASKS PRESIDENT TO PAY MORE ATTENTION TO SMALL BUSINESSES

Medan, N Sumatra (Antara Bali) - President Joko Widodo is expected to pay greater attention to small- and medium-scale businesses (UMKM) that have proven to be great contributors to national economic growth.

"The smart programs implemented by the former president, such as obligating banks to channel credits to the UMKM, should be continued. The new government should strive to add to the programs," the Deputy Chairman of the Indonesian Chamber of Commerce and Industry (Kadin) for North Sumatra, Ichsan Taufiq, said here on Saturday.

He added that President Joko Widodo, better known as Jokowi, should also be able to select a capable minister to lead the UMKM.

According to Taufiq, the policy was important as many micro and small companies have yet to receive banking credit facilities, despite the presence of the rule mandating credit distribution to the UMKM. The volume of the credits was also relatively small.

"Many businesses are still trapped in the net of money lenders who do their business either overtly or covertly," the Kadin chairman said.

Taufiq further noted that extending major funds for lending to the UMKM sector was not extraordinary and in advanced countries, including Japan, China and Taiwan, the governments pay special attention to this sector, particularly to shore up the finances of these businesses.

Moreover, a representative of Bank Indonesia for North Sumatra, Difi A. Johansyah, acknowledged that the extension of credits to the UMKM was not maximal yet.

Credits to the UMKM in the second quarter of 2014 slowed down as a result of global crisis. Up until the second quarter, credits to the UMKM amounted to Rp44.16 trillion, an increase of only 17.79 percent as compared to that in the same period in 2013.

Also, the provision of credits in the first quarter of 2014 in North Sumatra increased by 23.20 percent. (WDY)