Indonesia trials lower-cost PNM loans for disadvantaged women
The financing trial caps interest at 8 per cent, compared with around 24 per cent, as the government seeks to broaden access to business capital.
Indonesia’s government is trialling an 8 per cent interest ceiling on financing offered to underprivileged women by state-owned microfinance provider Permodalan Nasional Madani (PNM), Coordinating Minister for Community Empowerment Abdul Muhaimin Iskandar said.
Iskandar said the President had ordered PNM to introduce the scheme quickly. The planned cut from around 24 per cent is intended to make capital more accessible, helping women build businesses and improve their families’ incomes.
PNM’s financing programme, which operates on a joint liability basis, has reached 23.3 million underprivileged women. Iskandar expressed hope that combining finance with business guidance would help women start enterprises despite their previously limited access to funding.
He also stressed that financial sustainability must be considered when lowering interest charges. The programme needed to stay financially viable so it could continue serving women seeking business capital, he said.
Alongside the financing initiative, the government is encouraging the expansion of micro, small and medium enterprises, especially those run by women. Iskandar said these efforts included improving their access to technology, markets and capital.
