Jakarta, Indonesia, September 09, 2013
—IFC, a member of the World Bank Group, signed a memorandum of understanding with the Indonesian Ministry of Law and Human Rights to help it further streamline the business start-up process for limited liability companies and set up a registry for movable assets such as crops, livestock, and machinery. These measures will make it easier to set up businesses, improve investment climate, and encourage economic growth.
The movable asset registry will allow small and medium enterprises to use their movable assets as collateral and apply for bank loans, thus improving their access to finance. Previously, IFC supported China and Vietnam in setting up their movable asset registry, enabling millions of lending to smaller businesses in those countries.
“The latest signing strengthens the ongoing collaboration between IFC and the Ministry of Law and Human Rights, and sets the stage for successful reforms that will make it easier to start a business and help small and medium enterprises grow by improving their access to finance,” said Aidir Amin Daud, director general of the ministry’s General Legal Administration.
Since 2003, the Ministry of Law and Human Rights has implemented national reforms that reduced the time for starting a business to 47 days from 168 days in 2004, according to IFC’s annual Doing Business reports. Out of 185 economies, the 2013 report ranked Indonesia 166 for the ease of starting a business and 129 for the ease of getting credit. These rankings lag behind most of Indonesia’s neighboring countries and underscore an acute need for Indonesia to undertake regulatory and licensing reforms.
“Indonesia faces the challenge of improving its investment climate continuously to achieve strong economic growth and create more jobs,” said Sarvesh Suri, IFC’s country manager for Indonesia. “IFC is committed to supporting the country’s efforts in these areas to attain sustainable growth.”
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. Working with private enterprises in more than 100 countries, we use our capital, expertise, and influence to help eliminate extreme poverty and promote shared prosperity. In FY13, our investments climbed to an all-time high of nearly $25 billion, leveraging the power of the private sector to create jobs and tackle the world’s most pressing development challenges. For more information, visit