MICROFINANCE - KUR - Govt asked to add more venture capitalists

JAKARTA: The government is asked to be more serious in providing easier access for small and medium enterprises (SMEs) to financing in line with Presidential Regulation 9/2009 on Financing Institution.

Capital assistance through the micro-business financing program (KUR) is considered not yet optimal to trigger new entrepreneurs.

Many start-ups cannot obtain KUR since they are considered not bankable. Andhika Anindyaguna, Secretary General of the Jakarta Indonesian Young Businesspersons Association (Hipmi), suggested the government adding more venture capital firms.

The financing system that involves companies to control shares for a certain period of time is considered more appropriate for the non-bankable SMEs.

"Article 21 of Law 20/2008 on SMEs also establishes that the central and regional governments have to prepare financing. We observe that the regulation has not been materialized, leading the program to trigger entrepreneurship not yet optimal," he said yesterday.

He also regretted that several regional governments, including the Provincial Government of Jakarta, had not had region-owned venture capitalist.

Hipmi, he added, would join hands with venture capital firms or suggest the Provincial Government of Jakarta setting up a venture capital firm, which was more suitable than KUR since venture capitalists would provide direct assistance for SMEs.

Moreover, inserted Andhika, the Hipmi would appeal to several related parties, including the central and regional governments, to establish the Jakarta Entrepreneur Center (JEC) to produce new entrepreneurs and empower youths who want to start running their own businesses.

He explained the JEC would become the center of information, education, and consultancy, including those on marketing and capital access for potential entrepreneurs.

"The JEC serves as a bridge to facilitate the relations among SMEs, established businesses, and the central and regional governments. This is a concrete suggestion from the Jakarta Hipmi. Besides, on October 28 we celebrate Youth Pledge Day. Therefore, they who want to do business should be facilitated, so they can help accelerating the economy." (wiw)

Source : http://www.bisnis.com/en/business/1id217493.html - Oct 29, 2010