2. Access to Credit
2.1 Banks
2.2 Other Sources
2.3 Credit Bureau

2. Access to Credit

Goal – An efficient, transparent financial sector that provides a broad range of citizens with access to multiple forms of competitive credit so that they can start businesses, build wealth, and purchase property


2.1 Banks (Strong)

Core Question: Are traditional banking services robust and extensive enough to serve the needs of the population to help them build wealth and purchase property?

Yes. The banking industry has developed nicely in Indonesia with businesses being able to obtain loans easily from robust and continuously improving banks. Mircolending institutions are also in place to increase banking and loan services to the poor.

Access (Very Strong)

2.1.1 How easy is it to obtain a bank loan?

Ranked 16 out of 148; Score 3.8 out of 7; Trend =

Soundness (Strong)

2.1.2   How sound are the country’s banks?

Ranking 70 out of 148; Score 5.0 out of 7, Trend ↑

2.1.3  Microlending (Strong)

The majority of microlending institutions are rated 4 out of 5 diamonds Microfinance allows citizens without traditional creditworthiness to build a credit history. How many microfinance institutions are operating in the country?

78 microlending institutions exist in Indonesia including government/non-government banks, local credit unions, microcredit companies and fund associations with international network affiliations. Indonesia was one of the first nations in Asia to develop commercial microfinance. With regulated financial institutions delivering most of the volume of microfinance services throughout the country, various aspects of ‘People’s credit banks’ or BPRs materialized more than a century ago. Microcredit is described as a loan below Rp.50 million (US$5,373) by Indonesia’s central bank. What is the number of active borrowers per institution?

Bina Artha: 80,917; MBK Ventura: 369,738; KOMIDA: 68,278; Dian Mandiri: 44, 276; TLM: 32,407

Source: Microfinance Information Exchange


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2.2 Other Sources (Very Strong)

Core Question: Are entrepreneurs free to raise capital outside the banking system including venture capital and/or by issuing stock in a well-regulated stock exchange?

Yes. The ongoing development of the banking system in Indonesia has given entrepreneurs the ability to raise money through the stock market and venture capital with limited government control.

Financial Freedom (Strong)

2.2.1   How much control does the government exert over financial services?

Indonesia received a score 60 out of 100 on the Heritage Foundation Index of Economic Freedom indicating limited government control over financial services. However, foreign investment in several sectors of the economy requires government approval. The financial sector remains stable, and a Financial Services Authority has been formed to improve regulatory efficiency. The government has allowed more foreign involvement in the financial sector, although limits remain.

Venture Capital (Very Strong)

2.2.2   How easy is it for entrepreneurs to find venture capital?

Ranked 17 out of 148; Score 3.7 out of 7; Trend ↑

Equity Investors (Very Strong)

2.2.3   How easy is it to raise money by issuing shares on the stock market?

Ranked 29 out of 148; Score 4.3 out of 7, Trend ↑

Source: The Global Competitiveness Report 2013-2014, World Economic Forum


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2.3 Credit Bureau (Strong)

Core Question: Is comprehensive credit information available through public and private credit bureaus?

Yes. Information at credit bureaus is readily available in the country while a strong percentage of firms and individuals have borrowing history and information. Talks about the first private credit bureau are underway.

Overall Ranking  86 out of 189; Trend

Coverage (Strong)

2.3.1   What is the depth of information available in credit bureaus?

Score: 4 out of 6 with a higher number indicating more information is available.

Public (Very Strong)

2.3.2   What is the extent of public credit registry coverage?

42.1% of individuals and firms are listed in a public credit registry with information on their borrowing history from the past 5 years.

Private (Very Weak)

2.3.3   What is the extent of private credit registry coverage?

There is currently no private credit bureau in Indonesia, however there have been talks by the IFC to develop the first private credit bureau in the country.