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IFC Report Shows Indonesia’s Women-owned SMEs Need $6 billion in Financing

Jakarta, Indonesia, May 24, 2016 —IFC, a member of the World Bank Group, today released a report showing women-owned small and medium sized enterprises in Indonesia face a $6 billion financing shortfall to build their businesses, hampering their ability to contribute to the country’s economic growth.
Women own 51 percent of small and 34 percent of medium businesses out of the 706,000 SMEs in the country. However, women-owned businesses remain disproportionately constrained by a significant lack of supplied credit despite their attractiveness as customers. Banks often hesitate to lend women money on traditional financing terms, as many women lack the required collateral, such as having a property registered under their own name. Only one percent of all loans to SMEs in Indonesia are collateral-free.  Women also report finding banking procedures onerous, with 40 percent saying they are a hindrance to accessing credit compared with 28 percent of men.
Combined with family and household responsibilities, women face big challenges in running a successful business. Nonetheless, women are more likely to pay back their loans on time and usually operate in more creditworthy sectors, resulting in lower default rates. Moreover, more women categorize their businesses as highly profitable compared with men.
“The findings of this report demonstrate the crucial role that financial institutions can play to help raise the financing needed to increase women’s access to finance and boost their businesses,” said Vivek Pathak, IFC Director, East Asia and Pacific.
Financial institutions that can offer innovative and gender-sensitive value propositions, such as loan products with flexible collateral requirements and repayment schedules, are best positioned to tap this market, the report finds. Providing business skills training, access to information, and networking opportunities that cater to women can help women business-owners gain valuable skills to grow their businesses while improving their access to financing. Banks can also work with external partners and source alternative delivery channels, such as mobile and internet banking, to reach time-poor women entrepreneurs more effectively.
The report is part of a partnership between IFC and the Goldman Sachs 10,000 Women initiative to close the estimated $285 billion global credit gap for women entrepreneurs.
“We hope to further expand our partnership with IFC in Indonesia to place more capital in the hands of women entrepreneurs, who will drive future economic growth and job creation,” said Harry Naysmith, Head of Goldman Sachs in Indonesia.
In 2014, IFC and Goldman Sachs 10,000 Women launched the Women Entrepreneurs Opportunity Facility, dedicated to expanding access to capital for up to 100,000 women entrepreneurs.  To date, the Facility has committed more than $420 million to financial institutions in 15 emerging economies to help 25,000 women entrepreneurs access the capital they need to grow their businesses.
IFC, together with report partner USAID and Goldman Sachs 10,000 Women , will discuss the results of the study in a forum entitled “ Women-owned SMEs in Indonesia - A Golden Opportunity for Local Financial Institutions ,” which will be held on May 24 at the Dharmawangsa Hotel, Jakarta.
The study can be found here .
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence, to create opportunity where it’s needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit
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About Goldman Sachs 10,000 Women
The Goldman Sachs 10,000 Women initiative is a campaign to foster economic growth by providing women entrepreneurs around the world with a business and management education and access to capital. The initiative has reached women from across 56 countries through a network of 100 academic, nonprofit, and bank partners. In partnership with the International Finance Corporation (IFC), Goldman Sachs 10,000 Women launched the first of its kind global finance facility in 2014 to enable up to 100,000 women entrepreneurs to access capital.