TEMPO.CO, Semarang – PT Jaminan Kredit (Jamkrida) Jawa Tengah aims to reach 150,000 micro, small, and medium enterprises (MSMEs) customers this year. The newly established credit guarantee institution by the Central Java government is seen as having great potential to support small businesses just starting out.
"We are ready to provide guarantees for MSMEs if they face obstacles in meeting financial institution requirements," said Adi Nugroho, Director of Jamkrida Jawa Tengah, in Semarang on Monday, March 13, 2017.
Currently, Jamkrida Jawa Tengah guarantees loans for 68,421 MSME players, with total credit guarantees amounting to IDR 1.93 trillion. According to Adi, the institution targets MSME owners who struggle with financial institution requirements, such as those operating for less than two years or lacking a Business License (SIUP) and a Taxpayer Identification Number (NPWP).
In addition to providing guarantees to MSMEs, Jamkrida also supports eight cooperatives in Central Java that distribute capital to their members. These cooperatives make loan access easier, as they offer smaller loan limits and serve more MSMEs through their membership.
As a credit guarantee institution, Jamkrida provides benefits to financial institutions such as rural banks (Bank Perkreditan Rakyat) and district credit banks (Bank Kredit Kecamatan). One of these benefits includes reducing the non-performing loan (NPL) rate, as banks can still recover claims in case of default. "Jamkrida is also backed by a regional government-owned enterprise as recommended by the Financial Services Authority (OJK), allowing risk-weighted assets to be covered up to 50 percent," Adi added.
Jamkrida has already partnered with 63 financial institutions, with a total capital of IDR 120 billion. While open to further collaborations, Adi emphasized that potential partners must meet feasibility criteria, particularly in their financial reports.
At present, the company has recorded default cases with outstanding amounts of approximately IDR 200 million. However, given the total guaranteed loans reaching IDR 1.39 trillion, this default rate is considered manageable.
Suharnomo, Dean of the Faculty of Economics and Business at Diponegoro University, sees Jamkrida as a tangible manifestation of government intervention. "It is essential for the government to step in when banks are unable to accommodate micro-businesses," he said.
He hopes Jamkrida can address the complex challenges faced by MSMEs, both in terms of administration and other business constraints. "Jamkrida serves as a win-win solution for banks, cooperatives, and MSME customers," Suharnomo added.
However, he suggested that Jamkrida should receive more attention and support. With capital of only IDR 100-200 billion, he believes this amount is relatively small compared to the promising future of MSME financing.
Although Central Java's Jamkrida is not the first of its kind—following similar institutions in Jakarta, West Java, and East Java—Suharnomo believes that with proper management, it could significantly boost the province’s economy. Central Java remains one of the provinces with a high number of impoverished residents at the national level.
EDI FAISOL
Source: Tempo.co