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Indonesia
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LOAN: INO 34113-01
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Small and Medium Enterprise Export Development
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Location
Selected provinces such as Central Java and South Sulawesi.
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Sector
Industry & Trade /Small & Medium Scale Enterprises
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Initial Listing
18 November 2002
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Most Recent Update
7 September 2005
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Executing Agency(ies)
Directorate General of Financial Institutions
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- Missions
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| TA Fact-Finding |
Loan Fact-Finding |
Pre-Appraisal |
Appraisal |
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22 Mar-11 Apr 2001 |
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14 May-8 Aug 2002 |
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Loan Approval Date
17 December 2002
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Estimated Completion Date
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- Cost and Financing Plan (in US$ million)
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| Source |
Foreign Cost |
Local Cost |
Total |
| Bank |
85.00 |
0.00 |
85.00 |
| Cofinancing |
0.00 |
0.00 |
0.00 |
| Borrower |
0.00 |
0.00 |
0.00 |
| Beneficiaries |
0.00 |
0.00 |
0.00 |
| Others |
0.00 |
0.00 |
0.00 |
| Project/Program Cost |
85.00 |
0.00 |
85.00 |
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OCR |
ADF |
Total |
| Loan Amount |
85.00 |
0.00 |
85.00 |
- Description
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The Project aims to (i) support economic growth and contribute to poverty reduction through job creation and promotion of labor-intensive exports; and (ii) develop the nascent small and medium-sized export sector directly via investment in its restructuring and expansion, and support for business advisory services. Indirectly, the Project will improve the efficiency of financial intermediation, as well as the capacity of banks and exporting firms to appraise and conduct project lending on market-based terms.
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- Thematic Classification
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- Rationale
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Since the financial crisis, there have been important changes in Indonesia's industrial policy. In particular, there is recognition that the previous bias toward large firms needs to be corrected and a more liberal and conducive environment, established for all firms, including SMEs. The Government, with ADB support, has been undertaking policy reforms and addressing the daunting challenges faced by SMEs, including lack of access to market-oriented credit. Distortions attributable to policy biases have imposed relatively high entry and operating costs on SMEs, whose share in industrial value added and exports are lower than those of neighboring countries. The proposed Project focuses on provision of market-based credit and business services for export-oriented SMEs to consolidate recent export growth among small exporters thereby sustain the county's nascent economic recovery.
- Objectives and Scope
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The Project aims to reduce poverty by promoting economic growth and sustainable employment generation through the strengthening of the SME export sector. In pursuit of this goal, the Project will facilitate the development and promotion of SME exports by helping increasing value added, diversifying SME businesses and fostering backward and forward inter-linkages nationwide, with emphasis on selected provinces (such as Central Java and South Sulawesi). The Project has three major components: (i) establishment of a preshipment export finance guarantee (PEFG) fund to enhance access to export credit for exporters, including SMEs; (ii) establishment of small exporters' investment facility (SEIF) to facilitate provision of investment credit for expansion and modernization of export-oriented SMEs; and (iii) technical assistance to strengthen small exporters business development services.
- Policy Dialogue
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- Environment Category:
B
- Environment Impact and Mitigation
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- Social Aspects and Remedies
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To be determined.
- Benefits and Beneficiaries
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The main benefits for the Government and SME exporters include (i) sustainable poverty reduction via employment generated by labor-intensive exports; (ii) improve mechanism for delivery of small investment credit; (iii) enhancement of trade finance for SME exporters; (iv) private sector support to business services for SMEs; and (vi) risk mitigation through better credit information.
- Public Consultation
- Arranged by Borrower and Bank
- Date for Consultation :
- Groups Consulted :
- Beneficiary Participation in Formulation
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Extensive consultations with representatives from Bank Negara Indonesia and Bank Ekspor Indonesia, SMEs were made in all stages of project formulation.
- Beneficiary Participation in Implementation
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- Consulting Services
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Not applicable.
- Procurement
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ADB's Guidelines for Procurement applicable to Development Finance Institutions will be followed, which require subborrowers to (i) demonstrate that the procurement procedures adopted are appropriate in the circumstances; (ii) ensure that the goods and services to be financed by subloans are purchased at a reasonable price; and (iii) ensure that all goods and services financed under the loan are procured from ADB member countries.
- Contacts
- Bank
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- Executing Agency
- Directorate General of Financial Institutions
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Contact Person
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Mr. Sri Bagus Guritno, Investment Officer
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Tel. No.
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(62-21) 3848305
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Fax. No.
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(62-21) 3847437
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E-mail
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Contact Person
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Fax. No.
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