Microfinance situation Sample Clauses

Microfinance situation. The microfinance sector in Indonesia is one of the largest in the world with over 50,000 microfinance institutions (MFIs), some in existence over 100 years. According to MixMarket (2007), Indonesia indeed ranks as the country with the largest gross loan portfolio in the world (USD 3.96 billion). Indonesia’s financial system is composed of a high variety of formal, semiformal and informal institutions. It comprises approximately 6,000 formal and 48,000 semiformal units, holding some 45 million deposit accounts and serving about 32 million borrowers. Contrary to other countries, non-government organizations do not play a significant role as independent MFIs. The Indonesian microfinance sector is mostly represented by commercial banks (such as BRI), secondary banks (such as BPR), village credit boards (BKD), pawning business, cooperatives, credit unions, savings and credit service posts (TPSP), etc. The majority of MFIs in Indonesia are however characterized by low growth in outreach and inefficient systems. They cite as their main constraint the lack of access to affordable capital. This is particularly relevant for MFIs working in rural areas. If financial and technical support is provided, microfinance institutions could play a key role in facilitating access to solar energy through adequate financial services Next steps for Indonesia: Identify a relevant financial model that can successfully promote access to solar energy technologies in Indonesia. Define how microfinance could fit in such a model. 3 Identifying relevant financial schemes for promoting access to solar energy technologies Main ideas: Past solar energy programs in Indonesia were based on financial models that were not adequate enough. Their weaknesses prevented the successful expansion of solar energy technologies in the country. Indonesia can learn from the Bangladeshi experience of IDCOL. The financial model implemented in Bangladesh indeed provides interesting solutions to the challenges faced by Indonesia in promoting access to renewable energy. Indonesian stakeholders should review their solar energy policies and programs along lessons learned and best practices. In this perspective, RENDEV recommends two different types of financial models:
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