Market opportunities and regulations microfinance in Indonesia

Market opportunities and regulations microfinance in Indonesia

Creators Devi Erna Rachmawati

This paper provides a systematic assessment of market opportunities and regulations microfinance in Indonesia based on social economic, demographic conditions, potential SMEs Industry, market segmentation, market penetration and how new regulations microfinance in Indonesia. Indonesia has potential market for microfinance sector, with a range of commercial banks and over 60,000 MFIs,more than 28,07 million poor people or 11,37% from total population and more than 55,8 million microenterprises representing 98,79% of the total business industry in Indonesia. Currently, many people in Indonesia do not have adequate access to the bank financing they need to grow their businesses, particularly in rural areas and lack of training for micro businesses and poor people.To that end, Bank Indonesia issued a rule that requires banks to have at least 20% of their loan portfolio dedicated to microloans by 2018 opening up new opportunities to further grow the sector.Successful microfinance influenced by some factors such as social-economic, demographic conditions and regulations, so it is important to know about this conditions. Law Act No.1 of 2013 gives full authority to Otoritas Jasa Keuangan or OJK as a Financial Services Authority Institution to make regulations, licensing, and supervisions MFIs and expected to help the government of Indonesia to improve economic growth and reduce poverty in microfinance sector. This paper give information new regulations microfinance and concludes with presenting recommendation to improving themicrofinance in Indonesia for sustainable development of the microfinance sector in Indonesia.

[ISSN]1347-9415

[NCID]AA11831154