Tokyo – INDONESIA will have a Guarantee Law. The draft law is already in place and is expected to be passed by the legislature before the end of the 2015 calendar year. At the current harmonization stage, the legislative body of the DPR, representatives from the government, and the Indonesian Association of Guarantee Companies (Asippindo) still have the opportunity to closely observe guarantee systems supporting MSME credit in other countries.
Simultaneously, on October 27-28, 2015, the DPR, Asippindo, and representatives from the Ministry of Finance visited Japan and Italy, two countries whose MSMEs have survived thanks to credit guarantees from guarantee companies or credit guarantee corporations (CGCs).
According to Diding S. Anwar, Chairman of Asippindo, similar to MSMEs in Indonesia, SMEs in Italy also play an important role in the economy of a country with a population of 120 million. “During the 1998 Asian crisis, MSMEs saved Indonesia’s economy. Likewise, Italy has survived the economic crisis in the Eurozone over the past two years thanks to the role of its SMEs,” said Diding, who is also the President Director of Jamkrindo, when contacted by Infobank from Tokyo, Japan, while in Torino, Italy, on October 28, 2015.
Meanwhile, in Japan, there was also an experience during the 2008 global financial crisis when MSME credit stalled. The government established the Japan Finance Corporation (JFC), which not only provided direct loans to MSMEs but also absorbed risks from CGCs that guaranteed MSME credit issued by financial institutions. “With the guarantee scheme created by the Japanese government, stalled MSME credit due to the crisis was able to flow again,” said Nanang Waskito, Director of Guarantee at Jamkrindo, to Infobank in Tokyo on October 29, 2015.
The comparative study conducted by Asippindo, the DPR, and representatives from the Ministry of Finance was divided into two groups, one visiting Japan and the other Italy. The delegation to Japan met with JFC, the Japan Federation Guarantee (JFG), and the Ministry of Economy, Trade, and Industry. Meanwhile, the delegation visiting Italy met with two CGCs, Eurofidi and Unionfidi, as well as the Association of Small and Medium Enterprises (API).
According to Marco Corcioni, Credit and Financial Director of API, the SME sector in Italy is composed of 27% manufacturing, 25% wholesale and retail trade, 25% services, 20% crafts, and 2% agriculture. API's role includes helping SMEs gain access to business development. “As well as assisting SMEs in accessing the National Guarantee Fund, negotiating interest rates with banks, and securing guarantees,” said Marco Corcioni.
Meanwhile, according to Giorgio Guarena, CEO of Unionfidi, the Italian government encourages financial institutions to provide credit with the backing of guarantee companies such as Unionfidi. “Credit guarantees here are very important and can only be provided by guarantee institutions,” said Giorgio.
API also holds a 51% stake in Eurofidi, the largest CGC in Italy. Regional governments in Italy also own 23% of Eurofidi’s shares as a sign of their commitment to SME guarantees, while the remaining shares are held by banks. “We provide a coverage ratio of 70% to 80%, depending on the credit rating of the SME,” said Massimo Ceretto, Director of Eurofidi.
The number of CGCs in Italy is quite large, reaching nearly 700, with 62 of them having assets exceeding €150 million and being supervised by the Bank of Italy. “More than 600 CGCs have assets below €150 million and are not supervised, which is why they are now required to increase their capital,” concluded Giorgio Guarena.
(Source: Infobanknews.com : Karnoto Mohamad)