Microfinance Industry Report: Indonesia - Banking with the Poor ...
Microfinance Industry Report: Indonesia - Banking with the Poor ...
Microfinance Industry Report: Indonesia - Banking with the Poor ...
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Currently, <strong>the</strong> largest microfinance program in<br />
<strong>Indonesia</strong> is a part of <strong>the</strong> National Program for<br />
Community Empowerment or Program Nasional<br />
Pemberdayaan Masyarakat (PNPM). The PNPM,<br />
launched in August 2006, is <strong>the</strong> Government’s<br />
primary poverty alleviation program and is a multifaceted<br />
program covering health, education, water<br />
and sanitation, infrastructure and governance. The<br />
program builds on <strong>the</strong> Kecamatan Development<br />
Program (KDP) and Urban Poverty Program<br />
(UPP) which have operated from 1998 and 1999<br />
respectively. The program receives significant<br />
support from <strong>the</strong> World Bank.<br />
The micro-credit operations of <strong>the</strong> KDP and UPP<br />
programs have been considered inconsistent in terms<br />
of repayment rates and <strong>the</strong> majority of programs<br />
have not reached operational sustainability. Efforts<br />
are being made to ensure that <strong>the</strong> PNPM, in both its<br />
rural and urban incarnations, learns from <strong>the</strong> lessons<br />
of previous programming in aiming to achieve<br />
international best practice. Program design options<br />
are currently being finalised and <strong>the</strong>refore it remains<br />
to be seen <strong>the</strong> extent to which PNPM microcredit will<br />
improve on previous government programming.<br />
24 microfinance industry report - INDONESIA<br />
<strong>Indonesia</strong>_<strong>Report</strong>_forprint.indd 24<br />
27/05/2009 3:14:43 PM