Editions : July-September 2016

JOURNAL | INDONESIA 360 By: Keith Loveard and Shinta Eka Puspasari

The Indonesian government believes that pushing money into the micro, small and medium enterprise (MSME) sector is a major part of boosting economic performance. It is a pro-people policy that has generally been accepted as a genuine way of providing improved equality. Yet a study of the profits being made by the banks suggests they are the major beneficiaries of the microfinance business and that much more could be done to generate grass-roots economic activity.

If the banks are doing well, the non-bank institutions are doing even better. Details on this sector are hard to come by since none of the institutions publish financial reports. Yet previous reports suggest that some charge as much as 94 percent a year for loans, a rate that puts them into the category of loan sharks.

Why MSMEs matter

To read the complete article, please subscribe.
You must be logged in as a Strategic Review subscriber to continue reading. If you are not yet a subscriber, please subscribe to activate your online account to get full online access.
Click Here To Login,
Buy a premium PDF version of this article
Subscribe and get premium access to Strategic Review's content
Please login to leave a comment