Microcredit in rural development: requirement and recommendations for government support and intervention

摘要

One of the major problems of micro and small enterprises (MSEs) in Indonesia is access to capital, but, in fact, even if capital is provided, microcredit institutions do not exist or are unable to service microcredit for MSEs. This paper will discuss the kinds of institutions that are involved in providing microcredit in Indonesia and explore the kinds of microcredit that is offered to MSEs. Constraints and challenges that microcredit institutions face currently, and the efforts that have been, or should be, made to develop the role of microcredit institutions are discussed. Importantly, this paper makes recommendations for government actions to encourage the role of microcredit institutions.