Three European development finance institutions have pledged a total of $55 million to help close the financing gap for women-led microenterprises in Indonesia’s rural regions. Swedfund, Finnfund, and the Belgian Investment Company for Developing Countries (BIO) are backing a $199 million syndicated loan facility coordinated by the International Finance Corporation (IFC).
The facility is aimed at Amartha, an Indonesian fintech platform that connects lenders with underserved microentrepreneurs. By improving access to affordable capital, the initiative hopes to enable thousands of women in remote areas to grow their businesses and strengthen local economies.
Amartha operates by linking funders with rural borrowers through a digital platform. “Amartha connects lenders to rural entrepreneurs. It operates as a centralising digital platform enabling lenders to disburse loans to the end customer,” said Björn Areskog, senior investment manager at Swedfund.
Indonesia’s micro, small and medium enterprise (MSME) sector employs 97% of the workforce, but access to finance remains a significant challenge. Swedfund highlights a financing gap of $21 billion. For women, especially those outside the island of Java, the challenges are even greater. Of the country’s 44 million micro-enterprises, female-run businesses are among the least supported financially.
“The platform targets women entrepreneurs working in agriculture, small retail, or handicrafts – groups that have historically been among the most underserved,” Areskog explained. “Amartha identified that market opportunity to provide the working capital women entrepreneurs need to develop their business.”
Jane Niedra, investment director at Swedfund and leader of its financial inclusion team, added that men are less affected by these funding gaps as they are more likely to be employed in salaried jobs. Swedfund has committed $25 million of the $55 million package, with Finnfund and BIO each contributing $15 million.
Traditional banks often struggle to serve rural areas, finding it commercially unviable to lend to small enterprises with no credit history or collateral. Areskog noted that Amartha helps to bridge this gap. It enables lenders to issue group loans through its digital system and offers a range of additional services via an e-wallet. These include digital payments, savings options, and even peer lending, where customers can act as micro-lenders using their own funds.
By offering affordable, unsecured loans and financial services tailored to those with limited formal credit history, Amartha aims to empower women economically and promote inclusive local development. “It can be a challenge for banks and other financial institutions to reach individuals in rural and sparsely populated areas, who have therefore been overlooked,” said Areskog. “Amartha has an operational force dispersed across rural areas, meeting up with groups of women and providing them with digital financial support where possible to build scale and efficiency.”
According to Areskog, 70% of loans underwritten by Amartha go to customers living outside Java,“This makes it particularly important as a vehicle for financial inclusion,” he added.
The company also works in partnership with the Indonesian government to run a digital transformation programme. This includes digital literacy training for rural communities, helping integrate female micro-entrepreneurs into the broader digital economy.
Swedfund said this component of the initiative is key to boosting the competitiveness and resilience of rural businesswomen. By supporting both access to finance and digital knowledge, the IFC-led initiative seeks to lay the foundation for more sustainable growth in some of Indonesia’s most underserved areas.
