Download PENJAMINAN KREDIT UMUM

By: Choirul Djamhari
Deputy Minister for Business Development and Restructuring
Ministry of Cooperatives and SMEs
Chairman of Board of Supervisors of Perum Jamkrino
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The Indonesian economic growth is 6.1% in 2010 with
GDP of USD 714 billion.
Indonesian SMEs (Small & Medium Enterprises including
cooperatives and micro enterprises):
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Contributing 53,3% of GDP;
Providing 96,2 million job opportunities accounting for 97,3 of
total labor force;
Serving as sources of income among grass root, thus
contributing to poverty alleviation;
Driving innovation and developing new products in efficient
ways
Nurturing mentality and spirit of entrepreneurship;
Fostering industries, as big companies need supports from
SMEs;
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Generating export opportunities
Ensuring equitable and sustainable development
as they are spread out all over the country.
SMEs have proven their resilience to survive
within the ailing national economy.
As SMEs are the largest group in the
economic structure and they represent the
“people’s economy” of Indonesia, then
SMEs should be given of the foremost
priority in the national development.
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SMEs in Indonesia
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Net assets: more than IDR10 billion
(USD1 million), or
Annual sales: more than IDR50 billion
(USD 5 million)
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Number of entity: ±4,372 unit or 0,01%
Share to :
- total employment : 2,96%
- GDP: 44,44%
- non oil export: 79.83%
- total Investment : 47,11%
Net assets: more than IDR500 million
(USD50.000) up to IDR10 billion (USD1
million), or
Annual sales: more than IDR2,5 billion
(USD250.000) up to IDR50 billion (USD5
million)
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Number of entity: ± 39,657 unit or 0,08%
Share to :
- total employment: 3,48%
- GDP: 13,43%
- non oil export : 13,10%
- total Investment : 23,81%
Net assets: more than IDR50 million
(USD5.000) up to IDR500 million
(USD50.000), or
Annual sales: more than IDR300 million
(USD30.000) up to IDR2,5 billion
(USD250.000)
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Number of entity: ± 520.221 unit or 1,01%
Share to :
- total employment : 4,26%
- GDP: 10,08%
- non oil export : 4,85%
- total Investment : 20,69%
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Number of entity : ± 50,697,659 unit or
98,90%
Share to :
- total employment : 89,30%
- GDP : 32,05%
- non oil export : 2,22%
- total Investment : 8,39%
Max net worth (excl. land & building) : IDR
50 million (USD 5,000)
Max. annual sales : IDR 300 million (USD
30,000)
Data source: Statistics Indonesia, 2009 (data as of 2008)
MSME definition refers to MSME Act No. 20/2008
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Indonesian SMEs generally have some
handicaps to access to financing for their
business development.
A lack of formal credit access due to lack of
collateral.
Currently, banking system is the most
significant source of financing for SMEs,
and other alternatives are saving & loan
cooperatives, pawnshop, multi-finance
companies, non-bank financial institutions.
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SMEs FINANCIAL SERVICE PROVIDERS
Non Bank Institution
CGC
Saving and
Loan
Cooperative
Pawnshop
Multi
finance/
Leasing
Company
Non
Bank/Cooperativ
es/Microfinance
Institution
Rural Bank
Bank
Commercial
Bank
SMEs
51.25 million
business unit
Non Bank
Informal
Institution
Money Lender
Source: Central Bank of Indonesia
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Number of Banks (as of Arpil 2011)
Commercial Banks (conventional)
Rural Banks (conventional)
Sharia Commercial Banks:
-Sharia Commercial Banks
-Sharia Business Unit of Comm Banks
Sharia Rural Banks
Grand Total
Tot Banks
Tot Offices
121
14.140
1.680
3.996
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1.276
315
153
293
1.988
20.020
Source: Banking Statistic, Central Bank of Indonesia, April 2011
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Need of Credit Guarantee
 To bridge the need of SMEs financing and
the banks’/creditors’ requirement of credit
lending.
 Credit Guarantee for SMEs is a key to
greater access to financing.
 Given to the feasible SMEs but not bankable
in terms of collateral requirement.
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Feasibility
Enterprise
Large
Medium
Feasible for
Go Public
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Feasible &
Bankable
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Feasible but
not Bankable
Not feasible
& not
bankable
Small
Financing
Micro
Guaranteed
by CGC
Capital Market
No
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Bank
Lease financing
Venture Capital
Optional
Optional
Optional
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Bank
Lease financing
Venture Capital
Rural Bank
Pawn Shop
Micro finance
Inst
Guarantee
Optional
Optional
Optional
Optional
Optional
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Pawn Shop
Micro Finance
Inst
Money Lender
No
No
No
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Legal Background:
◦ Presidential Decree No. 2/2008 of Guarantee Institutions
◦ MOF Regulation No. 222/2008 of Credit Guarantee Company and
Credit Re-guarantee Company
As legal background, the grand design of credit guarantee system in
Indonesia consists of:
◦ National and Regional Credit Guarantee Companies
◦ Credit Re-guarantee Company
◦ Government support as:
 Regulator: Capital Market Supervisory Body and Financial
Institutions
 Shareholder for National Credit Guarantee Company
 Local government as the shareholder of Regional Credit Guarantee
Companies
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At the moment, there are 4 CGCs in Indonesia
namely:
◦ Perum Jamkrindo
◦ PT Penjamin Kredit Pengusaha Indonesia/PKPI
(private CGC)
◦ Jamkrida Jatim
◦ Jamkrida Bali Mandara.
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The government support is given to the
establishment of regional credit guarantee as
well as the supervision of the existing CGCs.
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Current Guarantee Issues:
Government Policy to Enhance SMEs loan
Banking/FIs
Sector
Government
- Reducing Risk Weighted
Assets on credit for SMEs
for credit that guaranteed
by the state
owned/accredited CGCs.
- Loan for Food Securty and
Energy
- Loan for Cattle Breeding.
- Partnering with CGCs to
increase SMEs loan
lending.
KUR Guarantee Program
& other Govt Loan
Program
Improving
Regulation for
CGCs
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Target of
Commercial Bank
SMEs clasification
Feasible & Bankable
Feasible but not
Bankable
Target of SMEs
Credit Guarantee
Increasing the
Guarantee Capacity
Not Feasible,
Not Bankable
Additional
Government Shares
Target of
Government
Program
Feasible and not
Bankable
>
Guarantee
Capacity
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KUR Program supported by Indonesian CGCs
(Jamkrindo and Askrindo), in which the government
induced Additional Government Shares (AGS),
totally IDR 3.75 Trillion since 2007.
KUR Program targets 10x of Gearing Ratio, at least
10 times of the AGS (IDR 37.5 Trillion) to be lent as
KUR Loan to the SMEs.
The guarantee for KUR is provided in “Conditional
Automatic Cover” mechanism, the evaluation of the
credit fully conducted by the banks.
KUR Program has been monitored by the Policy
Board (interdepartmental committee).
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◦ To support the growth of CGC industry, the Government
through Capital Market Supervisory Body and Financial
Institutions is improving the regulation for CGC: No.
222/2008 of Credit Guarantee Company and Credit Reguarantee Company.
◦ Points of Improvements:
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Initial capital for CGCs establishment;
Reserved capital management of CGCs;
Investment management of CGCs;
Financial Ratios (liquidity, claim and gearing ratio, etc);
Credit Guarantee Products & Services;
Credit Guarantee Agency;
Etc.
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CHALLENGES OF THE INDONESIAN CGCs
Challenges include :
1. CGCs financially sustainable
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Generally, credit guarantee perceived as an
unprofitable business and take insurance business
market.
CGCs should find appropriate model of guarantee
business to meet the expectation of the
stakeholders (Govt, shareholders, SMEs, banks/FIs).
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CHALLENGES OF THE INDONESIAN CGCs
ii) Credit Guarantee Culture
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SMEs’ mindset of subsidized loan and rates if
CGC plays the role and their moral hazard.
Financial institutions’ moral hazard if loans are
guaranteed.
High interest rate and collateral requirement
even though risk is mitigated by guarantee
Guarantee fees will result in higher borrowing cost
for SMEs.
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CHALLENGES OF THE INDONESIAN CGCs
iii) CGCs capacity and competency
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Increasing capacity and capability to provide the initial
CGCs capital for establishment.
Finding appropriate business model for CGCs.
Increasing human resources competency
to provide excellent services and products improvement.
Increasing capacity in managing CGC’s financial and
investments.
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KEY SUCCESS FACTORS
Government
Support
• Implicit support
from shareholders
& Government to
facilitate growth
and sustainability
of Indonesian
CGCs.
•Improvement of
CGC Regulation.
Proper
CGCs
Business
Model
• Appropriate guarantee
business model that
meets the needs of
Shareholders,
Government, Bank/FIs
as well as SMEs.
• Adequate CGCs’ capital
and sound financial
management.
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Improvement
of CGCs’
Products &
Services
• Strategic business
synergies with
other corporations/
insurance.
• Balance between
financial
sustainability and
SMEs
empowerment
outreach.
SUSTAINABLE & GROWING
INDONESIAN CGCs
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