Indonesia’s microfinance industry is among the largest in the world with over 150,000 microfinance institutions, the majority of which are characterized by low growth in outreach and inefficient operation systems. However, loans extended by many microfinance institutions are used for consumption needs and do not automatically lead to more productive investments. Therefore, microfinance should be fostered with a view to balance both social and commercial objectives. The promotion of responsible finance is a key ingredient to this end. The project is implemented by the International Labour Organization (ILO).

The overall development objective of the project is to promote sustainable and responsible financial inclusion of micro-enterprises, which will enable them to be more productive, increase their income, and ultimately create more and better jobs.

Financial and other non-financial services are better aligned to the needs of micro-enterprises.

Overall client coverage of the ten partner microfinance institutions is increased, this from a baseline of 70,000 client micro-enterprises.

Productivity of current MFI-clients (micro-enterprises) is increased.

Evidence-based policy recommendations is provided to the government.

Coordination mechanism for responsible financial inclusion is established.

Risultati principali attesi:  

Microfinance institutions improved their outreach and service capacities.

Microfinance institutions implemented social performance mechanisms to better identify clients’ needs and able to assess social and economic impact of their existing and new financial services on micro-enterprises.

Innovative financial services for micro-enterprises and lessons on their social and economic impact are documented.

Steering committee that would monitor the implementation of the project at the national and provincial level is formed.

Approach of the project in financial inclusion is adopted as guidelines adjustment by the Financial Services Authority.

Fase 1 01.05.2014 - 30.04.2019   (Completed)