IFC PENSA and Swisscontact Establish PEAC MONAS

Jakarta, May 30 2005, -- IFC PENSA and Swisscontact today launched a Promoting Enterprise Access to Credit (PEAC) facilitation unit in Jakarta called PEAC Monas. PEAC Monas aims to improve micro and small medium enterprises' access to finance in the Jakarta Greater Area, or DKI Jakarta. The vision of this institution is to become a sustainable commercial enterprise that will facilitate local consultant firms, and financial institutions such as bank and rural banks, or BPRs, to accelerate commercial lending to the local business. IFC PENSA and Swisscontact launched a similar unit in East Java named PEAC Bromo last year.

PEAC Monas will enhance small business lending in DKI Jakarta by:

• Improving links between banks in DKI Jakarta and local consultant firms through training and the exchange of knowledge and services
• Improving local consultant firms' skills in financial matters and understanding of banking products
• Providing services to banks related to small business lending
• Developing network between banks and local consultant firms to improve services to the small business sector

“We know that there are a lot of small businesses who need access to capital, but they don’t have contacts with banks or don’t know how to apply for credits. On the other side, there are a lot of banks interested in lending to small businesses, but they face difficulties in identifying potential customers” said Peter Bissegger, Swisscontact Representative in Indonesia. “To bridge this gap is the main reason why Swisscontact and IFC-PENSA launched the PEAC program, which will link interested banks and small businesses through qualified service providers. PEAC MONAS will have the task to provide capacity building to service providers in financial issues in order to make them competent partners for banks in serving small businesses with credit. PEAC MONAS will offer its services to business service providers and banks on a commercial base in order to achieve long-term sustainability for this important task.”

Chris Richards, the General Manager from IFC-PENSA added that the banks have already have an interest in the market for small businesses , but some of the banks do not have capacities to give direct loan to small businesses. “Local consultant firms could assist banks in finding appropriate smaller businesses. IFC-PENSA will also provide technical assistance to banks to help increase their effectiveness in approaching small businesses”

To implement, operate, and develop the facilitation unit, IFC PENSA and Swisscontact plan to collaborate with local partners in DKI Jakarta. Using a transparent selection process and through consultation with experts conducted by the IFC PENSA and Swisscontact, a search is underway to identify partners that share a vision and have the capacity to deliver services. An orientation seminar was held on January 20, 2005 at which 32 business development services providers attended. Out of those, five local consultant firms were short-listed to present their business plans in March to a selection panel with representatives including Bank Indonesia, local consultant firms expert Perbanas, IFC PENSA and Swisscontact. PEAC Monas, a consortium between PT Penjamin Kredit Pengusaha Indonesia (PT PKPI) and TRIEKA Group, won the tender. Both companies have longstanding experience in working with micro, small businesses

The institution is fully supported by Bank Indonesia, regional and local banks, Government of DKI Jakarta, IFC PENSA, and Swisscontact, who will sit in the supervisory board. Swisscontact and IFC PENSA will offer technical assistance in terms of curriculum development, establishing networks with banks, promotion and performance monitoring.

The experience of PEAC Bromo, the facilitation unit for East Java shows promising first results: PEAC Bromo was successful in developing a good relation with banks and has already facilitated Rp. 1.4 billion of loans to MSMEs through business service providers with another Rp. 15 billion still in the stage of assessment.

In future, IFC-PENSA and Swisscontact plan to establish other PEAC operations in Central Java, South Sulawesi, East Kalimantan and Bali.

Program for Eastern Indonesia Small and Medium-sized Enterprise Development (PENSA) is one of project development facilities world-wide created and managed by IFC and supproted with donor funding. PENSA’s work in Indonesia focuses on SME development in growing sectors: Agribusiness, Oil, Gas and Mining Industries, Furniture and Handicraft manufacturing in the area of sustanainable supply chain and access to business servicess, finance and the improvement of the business enabling environment. PENSA is supported by the government of Australia, Canada, Japan, Netherlands, Switzerland, Asian Development Bank and IFC.

Swisscontact is a nonprofit oragnization for technical cooperation which was established in 1959 by private sectors and universities in Switzerland; and with a 30 years of experience in Indonesia. The organisation focuses on the private sector development through vocational training, small business promotion and urban ecology. In the SME issues, Swisscontact Indonesia works on two main issues: access to Market and Access to finance. Those two issues are handled by supporting the local organisations in developing specified services for small businesses such as technology and production, business linkage, promotion and financial managment.