Development finance institutions Swedfund, Finnfund, and the Belgian Investment Company for Developing Countries (BIO) have jointly committed $55 million in loans to Indonesian microfinance platform Amartha, the groups said in a joint statement.
The financing is part of a broader syndicated facility of up to $199 million, led by the International Finance Corporation (IFC), a member of the World Bank Group.
The initiative aims to strengthen financial inclusion among women entrepreneurs in Indonesia’s rural areas.
Amartha, a microfinance technology company founded in 2010, provides digital financial infrastructure to underserved micro-enterprises, particularly women-led businesses.
It operates through a cooperative group lending model, offering affordable, collateral-free loans to borrowers with limited or no credit history.
“Swedfund’s investment will enable Amartha to reach women entrepreneurs in rural areas with financial resources through responsible lending, boosting local economic stability and growth,” said Jane Niedra, Investment Director for Financial Inclusion at Swedfund.
Indonesia’s micro, small and medium enterprises (MSMEs) employ 97% of the country’s workforce but face a financing gap estimated at $21 billion.
Of the 44 million micro-enterprises, women entrepreneurs — especially outside Java — encounter the largest barriers to accessing affordable finance, often relying on informal lenders charging excessive interest rates.
Finnfund highlighted Amartha’s efforts to encourage savings alongside lending.
“It has recently developed a new app, AmarthaFin, whereby Amartha’s customers can become micro-lenders to other group loan borrowers. With AmarthaFin, borrowers can generate more income,” said Ulla-Maija Rantapuska, Senior Investment Manager at Finnfund.
Amartha’s digital transformation initiatives, supported by the Indonesian government, also include digital literacy training for rural villagers to integrate micro-entrepreneurs into the broader digital economy.
BIO’s CEO, Joris Totté, emphasized the importance of digital financial tools.
“Digital payments and e-wallets are powerful tools for financial inclusion, especially in rural communities where traditional banking infrastructure is limited,” he said.
Of the $55 million committed, Swedfund provided $25 million, while Finnfund and BIO each contributed $15 million. Proceeds will be fully directed to supporting women borrowers, particularly in regions where financing gaps are most pronounced.
As of September 30, 2024, Amartha had disbursed more than 23 trillion rupiah in working capital loans to 2.7 million MSMEs, with over 90% of the borrowers being women.