Providing better financial access to Indonesian micro and small enterprises
Microfinance institutions (MFIs) in Indonesia have significant potential to create jobs and reduce poverty by providing access to a range of financial services. The sector is gearing up for exponential growth and expected to reach more people in urban and rural areas with their microfinance products.
JAKARTA (Joint Press Release): Microfinance institutions (MFIs) in Indonesia have significant potential to create jobs and reduce poverty by providing access to a range of financial services. The sector is gearing up for exponential growth and expected to reach more people in urban and rural areas with their microfinance products.
Considering high number and double challenges (growth and sustainability) faced by MFIs, the MFIs should improve their performance so that they would be able to provide better and greater access for people who are self-employed, home-based industries and micro and small enterprises in general.
The seminar is conducted by the ILO and Bank Indonesia through the Promoting Micro and Small Enterprises through Improved Entrepreneurs’ Access to Financial Services (PROMISE IMPACT) project. Funded by Swiss State Secretariat for Economic Affairs (SECO), the project aims to strengthen the technical and management capacities of MFIs, the entrepreneurs’ capacity to run efficient and sustainable businesses and capacities of Bank Indonesia and other government agencies to access social and economic impacts of financial services.
The seminar provides a forum for dialogue and knowledge sharing among relevant stakeholders on challenges faced by MFIs in extending their outreach to micro and small enterprises, including self-employed entrepreneurs, who have a very limited access to financial services, and on financial barriers faced by micro and small enterprises on leasing, insurance and loans. In addition, the seminar discusses measures of success of MFIs which are not only on their financial performance but also on their social performance or their contribution to the social development of the community.
In addition, Bank of Indonesia through its financial inclusivity programme will strengthen six pillars on its national strategy on financial inclusivity (SNKI), consisting of financial education and finance management programmes, including understanding risks, utilizing governments’ programme on public financial services, mapping financial information, formulating policies and their supported regulations, improving intermediation and distribution as well as consumers’ protection. In relations to micro, small and medium enterprises (MSMEs), Bank Indonesia provides asymmetric information between MSMEs and banking sector as part of its financial inclusivity programme.
Key findings of the Bank Indonesia and ILO’s latest study on the impact assessment of financial literacy training on the BPR’s clients welfare at business and household levels are presented. The study was conducted for two years from January 2011 to April 2013, targeted to micro and small entrepreneurs who are over-indebted. The study reveals that financial education, as a part of services of MFI, has helped the over-indebted clients to be less vulnerable through good financial management, planned expenditure and separated business and household finance, and documented income and expenditure.
For further information please contact:
Mr Yufrizal, Senior Analyst of Bank of Indonesia, Tel,: +6221 3817512, Email
Mr Tendy Gunawan, National Programme Coordinator for Social Finance, Tel.:+6221 3913112 ext. 142, Email
Ms Gita Lingga, Media Relations Officer, Tel.:+6221 3913112 ext. 115, Email
Considering high number and double challenges (growth and sustainability) faced by MFIs, the MFIs should improve their performance so that they would be able to provide better and greater access for people who are self-employed, home-based industries and micro and small enterprises in general.
To further strengthened the role of financial institution in supporting the development of micro and small enterprises, the International Labour Organization (ILO) and Bank Indonesia is organizing a two-day seminar titled “Micro, Small and Medium Enterprises Development through Responsible and Sustainable Financial Inclusion” on Monday – Tuesday, 6-7 May 2013 in Jakarta. The seminar is aimed to raise awareness of relevant national stakeholders and policy makers on the importance of social performance measures and social impact of financial services.
The seminar provides a forum for dialogue and knowledge sharing among relevant stakeholders on challenges faced by MFIs in extending their outreach to micro and small enterprises, including self-employed entrepreneurs, who have a very limited access to financial services.
The seminar is conducted by the ILO and Bank Indonesia through the Promoting Micro and Small Enterprises through Improved Entrepreneurs’ Access to Financial Services (PROMISE IMPACT) project. Funded by Swiss State Secretariat for Economic Affairs (SECO), the project aims to strengthen the technical and management capacities of MFIs, the entrepreneurs’ capacity to run efficient and sustainable businesses and capacities of Bank Indonesia and other government agencies to access social and economic impacts of financial services.
The seminar provides a forum for dialogue and knowledge sharing among relevant stakeholders on challenges faced by MFIs in extending their outreach to micro and small enterprises, including self-employed entrepreneurs, who have a very limited access to financial services, and on financial barriers faced by micro and small enterprises on leasing, insurance and loans. In addition, the seminar discusses measures of success of MFIs which are not only on their financial performance but also on their social performance or their contribution to the social development of the community.
In addition, Bank of Indonesia through its financial inclusivity programme will strengthen six pillars on its national strategy on financial inclusivity (SNKI), consisting of financial education and finance management programmes, including understanding risks, utilizing governments’ programme on public financial services, mapping financial information, formulating policies and their supported regulations, improving intermediation and distribution as well as consumers’ protection. In relations to micro, small and medium enterprises (MSMEs), Bank Indonesia provides asymmetric information between MSMEs and banking sector as part of its financial inclusivity programme.
Key findings of the Bank Indonesia and ILO’s latest study on the impact assessment of financial literacy training on the BPR’s clients welfare at business and household levels are presented. The study was conducted for two years from January 2011 to April 2013, targeted to micro and small entrepreneurs who are over-indebted. The study reveals that financial education, as a part of services of MFI, has helped the over-indebted clients to be less vulnerable through good financial management, planned expenditure and separated business and household finance, and documented income and expenditure.
For further information please contact:
Mr Yufrizal, Senior Analyst of Bank of Indonesia, Tel,: +6221 3817512, Email
Mr Tendy Gunawan, National Programme Coordinator for Social Finance, Tel.:+6221 3913112 ext. 142, Email
Ms Gita Lingga, Media Relations Officer, Tel.:+6221 3913112 ext. 115, Email