THE PRO-POOR POLICY OF MICROFINANCE IN INDONESIA
This paper discusses and proposes the policy issues associated with the development of microfinance industry in Indonesia. Despite its capability of financing small-scale businesses, the development of the microfinance industry is far behind that of commercial banks. The policy focus on developing s...
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| Format: | Article NonPeerReviewed |
| Published: |
[Yogyakarta] : Universitas Gadjah Mada
2009
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| Online Access: | https://repository.ugm.ac.id/28355/ http://i-lib.ugm.ac.id/jurnal/download.php?dataId=11418 |
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| Summary: | This paper discusses and proposes the policy issues associated
with the development of microfinance industry in Indonesia. Despite
its capability of financing small-scale businesses, the development
of the microfinance industry is far behind that of commercial banks.
The policy focus on developing sound financial practices of
microbanks has ignored the role of semi-formal and informal
microfinance institutions (MFIs) in serving poor people. Compliance
with the sound banking practices could inevitably drive
microbanks away from serving the poor. Regarding the capability of
informal and semi-formal MFIs of outreaching the poor, the challenges
to microfinance policy in Indonesia is to develop inclusive
financial systems through which the progress of microbanks goes in
a parallel direction with the developments of semi-formal and
informal MFIs, such as cooperatives and rotating saving and credit
associations (ROSCAs). |
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