Youth and Access to Microfinance in Indonesia: Outreach and Options
Access to finance is a critical factor in developing self-employment opportunities for youth in Indonesia. This study looks at both the supply and demand sides of financial services to youth.
AuthorsImagineNations Group and The World Bank
Youth unemployment in Indonesia is a serious issue and a key concern of the current Indonesian government. Access to finance is a critical factor in developing self-employment opportunities for youth. Microfinance institutions (MFIs) provide access to financial services to low income populations. However, the extent of Indonesian MFI service provision to youth (defined as below 30 years of age) has not been examined. The World Bank, in partnership with the Indonesian government, is seeking to understand the current extent of institutional microfinance to youth and possible areas of support for financial deepening in this area.
Between May 15 and June 30, 2006, the Mercy Corps MICRA program conducted an original study on behalf of World Bank to examine existing supply of MFI services to youth in Indonesia, as well as demand for financial services among youth. The study covered five regions, and included interviews with nearly 900 youth and on-site appraisals of 21 MFIs, as well as desk reviews of hundreds of other MFIs and of youth enterprise development programs with credit component. This paper discusses key findings about both supply and demand of youth-inclusive financial services and provides recommendations for its implementation in Indonesia.