Nusa Dua | Delegations from credit guarantee institutions of 11 member countries of the Asian Credit Supplementation Institution Confederation (ACSIC) gathered in Bali from November 16-20, 2015, for the 28th ACSIC Conference. One of the agreed-upon outcomes was the inclusion of a new member country, Mongolia, into ACSIC.
The Chief Delegates Meeting decided to accept Mongolia as a new ACSIC member, bringing the total number of member countries to 12: Indonesia, Japan, China, South Korea, Thailand, Taiwan, the Philippines, Malaysia, Singapore, India, Nepal, and Mongolia.
Chairman of Asippindo, Diding S. Anwar, who acted as Chief Delegate at the conference, explained that the number of guarantee companies joining ACSIC is not limited per country. Any country can include as many as desired, as long as the respective country's financial authority provides a recommendation.
Next year, Thailand will host The 29th ACSIC Conference, followed by the Philippines in 2017. As ACSIC members, credit guarantee companies in Indonesia, all of which are part of Asippindo, can participate in these annual events.
In front of ACSIC Conference delegates, Diding revealed that 99 percent of businesses in Indonesia are micro, small, and medium enterprises (MSMEs) and cooperatives. This business segment significantly contributes to domestic employment.
"They are essentially the backbone of Indonesia’s economy," explained Diding, who also serves as President Director of Perusahaan Umum Jaminan Kredit Indonesia (Perum Jamkrindo).
However, he continued, only 18 percent of them have access to banks or financial institutions. This does not mean that the remaining 82 percent are incapable of repaying loans. They have healthy businesses, operate well, generate profits, and are able to repay loans.
"The problem is that they lack collateral," emphasized Diding. Because of this, banks and other financial institutions are unable to provide loans to expand MSMEs and cooperatives.
The difficulty in accessing external funding is not the only obstacle they face. Other challenges include a lack of marketing knowledge, limited financial management skills, low awareness of product presentation, and insufficient information on distribution channels, including exports and imports.
For this reason, as mandated by law, credit guarantee companies in Indonesia have two main tasks: to provide guarantees for eligible but unbankable MSMEs and cooperatives and to offer management consulting so they can operate and grow their businesses effectively.
According to Diding, Indonesian credit guarantee companies also need to learn best practices and experiences from other countries in supporting MSMEs and cooperatives. The ACSIC Conference serves as an excellent platform for sharing knowledge and experiences.
For example, the SME rating system implemented by KODIT in Korea, the SME creditworthiness rating by NSIC in India, and Confidi in Italy.
"I believe that this annual conference and seminar provide a great opportunity to learn all the best approaches and strategies and then adapt them to each country with necessary adjustments," said Diding. (*team/ndry)