Expanding Access to Finance for Small-Scale Businesses : Secured Transactions Reform--An Indonesia Case Study
A lack of access to finance has been one of the biggest impediments to the development and growth of the small-scale business sector in Indonesia. While micro, small and medium-sized enterprises (MSMEs) account for almost all employment in Indonesi...
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| Format: | Brief |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/319231483698846837/Expanding-access-to-finance-for-small-scale-businesses-secured-transactions-reform-an-Indonesia-case-study http://hdl.handle.net/10986/25826 |
| Summary: | A lack of access to finance has been one
of the biggest impediments to the development and growth of
the small-scale business sector in Indonesia. While micro,
small and medium-sized enterprises (MSMEs) account for
almost all employment in Indonesia (97 percent), the sector
as a whole accounts for just about 57 percent of Gross
National Product. Surveys suggest that one of the main
constraints on the growth of the sector is a lack of access
to finance, with almost half of Indonesian MSMEs citing
access to finance as the top constraint to business growth.
In 2012 the World Bank Group (WBG), in partnership with
Switzerland and Japan, engaged with the Government of
Indonesia to improve access to finance for the small-scale
sector by enabling the use of movable collateral for formal
lending. The use of movable collateral, such as vehicles,
machinery, equipment, inventory or livestock, make it
possible for enterprises and individuals who lack fixed
collateral, such as land and property, to access finance. It
also supports the growth of the financial sector, as it
promotes portfolio diversification. This case study shows
how the World Bank Group’s specialist team in Indonesia
engaged with the government to promote an enabling
environment and develop a sound secured transactions
infrastructure to increase access to finance for the MSME sector. |
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