Global Times - 80% of Indonesia's SMBs intend to increase capital in 2nd half of year

80% of Indonesia's SMBs intend to increase capital in 2nd half of year

Source: Xinhua
[14:33 July 28 2009]
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More than 80 percent of small and middle businesses (SMBs) in Indonesia intended to increase their capital in the second half this year, reflecting optimistic view on the country's economic prospect, a survey showed here on Tuesday.

"Eight countries surveyed in the Asia region showed their level of confidence over SMB sector, especially when they are compared to the same survey six months ago," said the Hong Kong and Shanghai Banking Corp. Ltd (HSBC) in its latest survey released here.

The regional index, the survey showed, increased to 107 points in the second quarter 2009 from 92 in the fourth quarter 2008.

"Indonesia which has index of 101 is one of the most positive countries with Vietnam (150), India (128) and China (105), while Malaysia (99), Taiwan (98), Singapore (93) and Hong Kong are the most pessimistic," said the survey.

Commenting on the survey, the HSBC Indonesia's head of banking business Steve Miller said Indonesia's SMBs were ready to act compared to survey in January that showed wait-and-see stance.

"The most important thing in this survey is the country's SMBs to increase their capital, which could be seen as a positive signal of their long term commitment," said Miller.

Basically, Indonesia's SMBs showed the most significant increase in intention to add capital, where 13 percent of them intended to do so, 37 percent planned to develop their capital while 45 percent wanted to keep their capital.

The survey also showed that 60 percent of Indonesia's SMBs were optimistic on the country's gross domestic product (GDP) growth with 17 percent of them expected growth above four percent.

Sandiaga Uno, the vice president of Indonesian Chamber of Commerce and Industry (KADIN) expressed his happiness of the survey result.

"It fortifies our view that SMB sector will keep its role to be our economy's backbone," said Sandiaga.

HSBC Emerging Markets Small Business Confidence Monitor is a bi-annual survey on SMB sector that reflects view of 3,400 SMBs players in 12 countries in Asia, Latin America and the Middle East.