Surabaya, February 16th 2004. The Canadian Ambassador to Indonesia, Mr Randolph Mank today announced Canada’s support for the International Finance Corporation (IFC) managed Program for Eastern Indonesia SME Assistance (PENSA). The Canadian Government has committed $3.35m USD to PENSA bringing PENSA’s total funding to $22m USD. Canada becomes the sixth Donor to PENSA joining Australia, Japan, The Netherlands, Switzerland and the IFC.
"Canada's development objective here is to support Indonesian efforts to reduce vulnerability to poverty", the Ambassador said. "To do this, we believe it is urgent to create meaningful new jobs, and that Indonesia's dynamic small enterprises are the best way to do this. We are very impressed by the growth and strength of the SME sector, which has been a major factor in overcoming the economic crisis. Canada has been
working with East Java's SMEs for the past seven years, and our contribution to PENSA is evidence of our commitment to work together with several other donors to continue SME support into the future."
The announcement came as the Ambassador toured PENSA’s new office in Surabaya. The office which was opened two weeks ago, will focus on assisting SMEs to gain greater access to capital. PENSA will not provide direct funding to SMEs but will work with the banking system to improve SMEs access to financing.
Chris Richards, PENSA’s General Manager, who accompanied the Canadian Ambassador stressed the importance of the Surabaya based Access to Finance program. “Since the crisis in 1998 SMEs have been the engine of Indonesian economic growth. Securing access to sustainable capital flows will be crucial to fuel their growth in future. Recognizing this PENSA has made access to finance an integral part of all its programs.”
Recognising this, PENSA is aiming to increase access to finance through three activities: bank training programs that to improve SME lending practices; developing consultants to help SMEs prepare loan applications; and assisting local and regional banks in providing commercial lending services.
PENSA’s Access to Finance program will be based from the new Surabaya office and will initially focus on banks and SMEs in East Java. However in time it is anticipated that the program will widen its activities to include the other cities in Eastern Indonesia covered by PENSA: Denpasar, Balikpapan and Makassar.
PENSA, is the ninth in a series of IFC managed SME focused technical assistance facilities. The facility has a five-year mandate and has been co-funded by IFC and the governments of Australia, Canada, Japan, Switzerland and The Netherlands, with initial funding commitments of $22 million.
