Indonesia Market Study : Movable Assets-Based Financing to Micro, Small, and Medium Enterprises
The report aims to assess the current market for movable assets based lending with respect to micro, small and medium enterprises (MSMEs) in Indonesia. The sections of the report highlight the addressable demand for MSMEs and the current supply pro...
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| Language: | English en_US |
| Published: |
International Finance Corporation, Washington, DC
2016
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| Online Access: | http://documents.worldbank.org/curated/en/797491477989942442/Indonesia-market-study-movable-assets-based-financing-to-micro-small-and-medium-enterprises http://hdl.handle.net/10986/25415 |
| Summary: | The report aims to assess the current
market for movable assets based lending with respect to
micro, small and medium enterprises (MSMEs) in Indonesia.
The sections of the report highlight the addressable demand
for MSMEs and the current supply provided by various formal
sources of financing in Indonesia. Traditionally, financial
institutions have preferred lending against fixed asset
collateral only. Using that as a starting point, the report
seeks to identify the current challenges in lending against
movable assets. It further extends the need for a greater
financial infrastructure that can facilitate the ability of
lenders to evaluate risks in movable assets based lending.
This report delves into the lending challenges faced by
MSMEs as well as the challenges that restrict greater supply
of credit by financial institutions. It draws on data and
insights based on discussions with over 70 financial
institutions in Indonesia, and an understanding of the
credit requirements of MSMEs – based on over 850 sample
cases for quantitative data. These findings were further
examined through in-depth qualitative discussions with 34
MSMEs spread across multiple regions in Indonesia. As the
Indonesian economy follows a traditional model of providing
credit based on fixed collateral, such as land and
buildings, the study focuses on: (i) understanding the
current credit demand that can be potentially addressed by
movable assets to complement the traditional model, and (ii)
the challenges that need to be addressed to facilitate the
ensuing movable assets based lending. |
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