PEMBUKAAN THE ASIA PACIFIC REGIONAL MICROCREDIT SUMMIT 2008, DI NUSA DUA, BALI, 28 JULI 2008
SAMBUTAN
PRESIDEN REPUBLIK INDONESIA
PADA
ACARA PERESMIAN PEMBUKAAN
THE ASIA PACIFIC REGIONAL MICROCREDIT SUMMIT 2008
DI NUSA DUA, BALI
TANGGAL 28 JULI 2008
Bismillahirrahmanirrahiim,
Assalaamu'alaikum Warrahmatulahi Wabarakaatuh,
Peace be upon us,
Om Swasti Astu,
Professor Budiono, Governor of Bank Indonesia, the Honourable Professor Muhammad Yunus,
I would like to thank for your excellent speech that’s given us, that inspires us all to do more, to do better in reducing poverty by succeeding this Microcredit Program across the region, across the globe,
Mr. Sam Daley Harris, the Director of the Microcredit Summit Campaign,
Dr. Toledo, former President of Peru, my friend, welcome!
Director of Bank Rakyat Indonesia,
Governor of Bali,
Excellencies Ministers,
Distinguished participants,
Ladies and gentlemen,
It is my pleasure and honor to welcome you all to this important summit and to Indonesia. We are very proud to host the representatives of some 60 nations at this gathering. To those of you who are in Bali for the very first time, let me warn you, this may not be the last time wishing you. Bali is beautiful at this sweet little corner of the world. I hope that you have a wonderful time here.
It is also a pleasure for me to welcome back Professor Muhammad Yunus to Indonesia. He last visited Indonesia in August 2007 and gave a presidential lecture on microfinance management as a way to help the poor break free from poverty. The Noble Peace Prize which he won in 2006 is a resounding recognition that microfinance is not just simply a tool to empower the poor, but it is also an important tool to promote peace, stability and political development.
We are gathered here today to once again tackle ourselves at enduring problem of poverty. With fuel prices creeping up ever higher, this problem will become ever greater, ever menacing. Many governments are revising their economic forecast and lowering expectations. This is potentially threatening to the political and socio-economic stability among us. If poor community is open, a disgruntled community full of frustration and anger. That is why, in the globalised world, we must tackle poverty together, to safeguard our collective future. Through this forum provides a timely opportunity to beat down the door of poverty. For more than a century, microfinance has rescued the poor from becoming even more impoverished. Microfinance provides the poor with small loans to start up business and to weather unexpected crisis. Indeed, microcredit has greatly contributed towards the Millennium Development Goals of poverty eradication.
Through gathering set as ours today, we can come up with even more innovative ways to lessen the burden of poverty. Why microfinance? Quite simply, because it works. If you have limited education and capital, but you have good ideas and want to start a business, microcredit is the only alternative. In the world of capital banking, lack of skill and capital translates into high risk, particularly if you are in agricultural sector. Microfinance institutions do not see risk. They see opportunity to the community and for themselves. Indeed, contrary to popular belief, small borrowers are good business. According to Bank Indonesia, less than one percent of loan to small enterprises are non- performing loans. In fact, the banks that survived Asia’s 1997 financial crisis were those that focused on small enterprises. And economicsts focused on small enterprises are making a long term investment, allowing the economy to grow from the bottom up. Microcredit is potentially important because it relieves unemployment, generating income for jobless families. But in order to save their businesses and self employment, they need key access to capital. Our goals are hindered by real world dillemas. It is fitting that this summit takes place here as Indonesia’s experience illustrates the common way that shapes the future of microcredit and what has been done to address that. Consider our history. The first real bank in Indonesia was established more than 100 years ago. By the beginning of the 20th century, some 13,000 communities and institutions were providing loans to rural enterprises. Today, Indonesia has more than 50,000 microfinance institutions among the largest collection the world. Yet, some 40 million Indonesians still lack access to any financial properties.
We refer to them as the ‘unbank majority’. They exist in every province and to gather by need you properties of microfinance outlets. These small and top enterprises lack collateral and without it, they often cannot accept more formal sources of finance such as state loans. The rest plead into unscrupulous money lender who charge them sky-high interests and leading them into endless indebtness.
Why do these millions do not have access to microfinance? First because many of them live in remote areas with no access to financial institutions, even microcredit institutions. We are constrained by geography and by infrastructural limitation. Secondly, many mircocredit institutions that do exist lack access to adequate capital or technical know-how. They fail to grow. We can only provide the most less of banking properties. Lack of microcredit is chaneled through community group, which is after the fund have been distributed. So, borrowers are stockless when they need an emegency injection of capital.
Excellencies, Ladies and Gentlemen,
The Indonesian government takes this problem very seriously. One of the top priorities of my administration is rural development as rural growth faces often congestion and unemployment. Therefore, we need to focus on microcredit in the rural sector. That is why, microcredit has been at the heart of my government policy in combating poverty and promoting the welfare in rural areas. Because of its importance, I have personally let my government national access to expand microcredit program to reach as many poor families in the fastest time possible. My government has also placed emphasis on development policies that promote growth with equity. We must ensure that economic try is spread more evenly and most importantly, trickled down to the poor. In my view, growth must also be inclusive. Any development process must, from the start, ensure that all elements of society including the poor have access to capital resources and opportunity. They must be reached and empowered so that all can grow. Thus, development and empowerment must go hand in hand. And in the wake of current energy and food crisis in many parts of the world, we do need a new built policy at the global level that would better protect the poor in developing countries.
The World Bank predicts that if the trend in food and oil crisis persist, we will see 100 million people pushed back to poverty. 33 countries around the the world will potentially experience political and social turbulence and MDGs will be pushed back seven years. We cannot let this things happen. Not in our time. Thus, microcredit can play an important role in this new built policy. Microcredit can be a critical solution as it alleviates poverty, ensure growth equity, and bridges development gap.
Distinguished guests,
Ladies and gentlemen,
We have seen encouraging progress in recent years. Many commercial banks are now actively venturing into microfinance. Bank Rakyat Indonesia, Bank Mandiri, and BNI have been at the forefront of finding innovative ways to reach the poor through microcredit in this country. For example, Bank Mandiri now offers loans of only a few hundred dollar and they are reducing transaction costs to technological development such as the use of ATM, and mobile electronic collection device. Commercial banks are also improving their link with mircofinance institutions, providing them with loans, either directly or through non-governmental institutions. Today, some 13 commercial banks are linked with some thousands of microfinance institutions. Indeed, Indonesia was one of the first countries in the world to foster this type of linkages. We hope that this relationship will only strengthen in the future. Various programms are also designed to help empower micro businesses. In late 2007, we launched a program called Credit for the People or Kredit Usaha Rakyat. It is specifically our subsidize guarantee scheme so that the government guarantees some 70 percent of the loans. The average loan size is small, only some 90 millions rupiah or about 1 thousand dollars.
We are very proud to record than more than 900,000 small enterprises have spent a credit from this program. This year alone, we hope to disburse some 14 to 15 trillion for this proper program equal to $ US1,6 billion. Indeed the world of mircocredit can be described by the five fingers philosophy. The first finger represents the financial institution, the provider of the loans. Second finger represents the government, which provides facilities, direction, stabilities, regulated for all parties concerned. The third finger represents the supporting institutions, those organizations that provide credit guarantee. The fourth finger represents, the NGOs, the financial consultants and other parties which give advice and guidance to the micro clients. And the last finger represents the micro client itself. All these five fingers are interconnected but and better synergi to them. The institutions, individuals in question must better understand each other’s need concerned and limitation. They must better communicate with one another and more often so that each party strive towards the same direction.
Ladies and gentlemen,
I grew up in a poor rural area, not unlike many parts of Indonesia. I remember very sadly how many families did not necessarily consider themselves poor and how individuals had great ideas about how to make a living. The problem was they did not have the fund to realise their potentials. I thought for a second how a little bit of help can go a long way particularly if we can count on monetary assistant when they really needed. Many small businesses require more capitals when a family member has a medical emergency or when natural disasters strike. They need financial help in order to keep the business running. Communities around the world are full enterpreneurial spirit but the resources available to them do not match their drive. They have to make sure that 175 million of the world poorest families can match their drive with appropriate credit.
Help them employ themselves. Help them gain the resources that will help them earn more than one dollar a day. Help them grow their communities. I sincerely hope that the broad range of view offered by this summit will result in some creative brainstormings about tackling the challenges of microcredit. I hope that we can share our best practices and encourage better cooperation among us. There is so much to learn and so much to be continued.
The potential among us is limitless. The millions of the poor are full of hope. They seek opportunities and they have the drive and will to see the opportunities. Let us keep their hope alive. Let us empower them with opportunities that will fill them with even more hope and drive. These two things, hope and drive grow communities, grow nation.
Finally
Ladies and gentlemen,
By saying bismillahirrahmanirrahim, I take great pleasure in declaring this summit opened.
Thank you.
Wassalaamu’alaikum warahmatullahi wabarakaatuh.
Biro Naskah dan Penerjemahan,
Deputi Mensesneg Bidang Dukungan Kebijakan,
Sekretariat Negara RI