Objectives
The SMEEDP will support economic growth and assist in reducing poverty through job creation and promotion of labor-intensive exports. As part of a larger assistance strategy, the Project aims at supporting the SME export sector directly via investment capital, a niche market within the entire SME sector lending. Indirectly, the Project will improve the appraisal capacity of banks to undertake
investment lending as well as the exporters capacity to apply for bank credit with sound financial advisory services. The Project presents integrated support to export-oriented SMEs nationwide, with priority to be given to subprojects from selected provinces with export potential such as East and Central Java (part of ADB’s geographical focus), Sulawesi (part of the East ASEAN Growth Area), and Bali. Components are as follows: (i) Small and Medium Exporters’ Investment Facility (SEIF) for small exporters to meet investment requirements for capacity
expansion and modernization; these investment funds will be channeled to public and private banks through Bank Ekspor Indonesia (BEI), which will manage the banks  risks, while the participating banks (PBs) will manage the exporters’ risk
(exporters will assume the foreign exchange risk of the subloans); and  (ii) TA grant of $500,000 to strengthen credit and project appraisal capacity for all PBs through technical administration unit, including training for bankers on SME credit scoring, basic trade finance instruments, as well as financial advisory services for SME exporters to have access to the SEIF.
Cost Estimates The total cost of the Project is estimated at $113 million  equivalent.
Of the total cost, $85 million or 75% is the foreign exchange cost and $28 million or 25% is the local currency cost. The former will involve funding for $85 million to  finance the SEIF.