Thursday, 4 July 2013

GOVERNMENT SHOULD SOCIALIZE THE EXISTENCE OF REVOLVING FUND MANAGEMENT INSTITUTION (LPDB) TO THE PUBLIC



Revolving Fund Management Institution (LPDB) believed that to maximize distribution of Rp. 1.9 trillion funds for working capital for cooperatives and micro, small and medium business (KUMKM) operators, it should promote socialization agenda on the existence of its services across Indonesia. In additional to conducting socialization, LPDB which is under coordinator of the Ministry of Cooperatives and Small and Medium Enterprises organized a partner meeting in provinces which are potential recipients of the fund.
               
Director of LPDB, Kemas Danial, Tuesday (4/2), explained that the aim of the socialization is as to maintain compliance of KUMKM in utilizing the revolving fund as well as to become a means of socialization in reducing bad debt or non-performing loans (NPL). The plan for fund distribution for this year as stipulated in the Business and Budget Plan (RBA) was Rp. 1.9 trillion distributed to 109,157 KUMKM through 768 partners consisting of cooperatives and non-cooperatives. Kemas amitted that LPDB was still facing heavy challenges in performing its duties and functions of distributing fund to KUMKM. Yet, however, LPDB will continually perform its duties so real sector operators will continue growing and increase their capacities.
               
Kemas stated that the heavy challenges were, among other things, KUMKM operators were not yet familiar with the services provided by LPDB. Many of the proposals submitted to LPDB could not be followed-up because there was no one which meets the feasibility standards.
               
Another reason is because the scope of services of LPDB is very wide. While, plan for construction of regional office could not yet be realized. This has a consequence on the speed of service to would be debtors. Consequently, performance of monitoring and evaluation on the development and repayment of debtors was also affected. The reason is every movement performed was limited. Therefore, starting increase of promotion of the services provided to KUMKM operators. “We conducted promotion through printed and electronic media”, he said.
               
Kemas said that LPDB proposed an additional budget of Rp. 4 trillion for accommodating requests for revolving fund from thousands of KUMKM operators, even though not many who knew about LPDB. The trend was growing from time to time. But, his party asked the support of all stakeholders who could evenly distribute revolving fund punctually and right to the beneficiary target.
               
Concerning interest rate for LPDB-KUKM borrowing, Kemas said that LPDB set a very low interest rate, which is 6% per annum for cooperatives and real sector and 9% per annum for Koperasi Simpan Pinjam (saving and loan cooperatives). Kemas mentioned that one of the missions of LPDB-KUKM is to realize government’s program in KUMKM financing in an attempt to increase productivity and competitiveness of people’s economy, workers absorption, growth of new entrepreneurs, and creation of work opportunities and to eradicate poverty.
               
Regarding rate of workers absorption through loan/revolving fund distribution, he said that as of December 31, 2012 number of workers absorbed had reached 676, 237 people, while in 2011 only 581, 488 workers absorbed. It shows that LPDB emphasized on workers absorption, and at the same time, continually attempting to reduce unemployment rate. (E)  



Business News - April 05,2013             

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