Indonesia

The rural banks (BPR) sector in Indonesia faces significant technical challenges, including limited capital resources, constrained human resource capacity, rapid advances in financial technology, narrow product and service offerings, and intense competition from commercial banks, cooperatives, and fintech companies. To address these barriers, the project is designed to enhance the operational resilience and competitive edge of BPRs.

Key interventions encompass the deployment of advanced risk management systems, the enhancement of capacity in micro and small loan analysis, and the promotion of digitalization to optimize banking operations. By collaborating with regional BPR associations, the project aims to generate meaningful impact across the entire sector.

With its office in Central Java, the project is currently operational in Java, partnering with the Indonesian Financial Supervisory Authority (OJK), the rural banks associations DPP Perbarindo and DPD Perbarindo Jateng, and individual BPRs. Trainings are also carried out in partnership with the Indonesian Deposit Insurance Corporation (LPS). The technical advancements introduced by the project are expected to strengthen the institutional capacity of BPRs, expand access to financial services, particularly productive loans, and ultimately drive sustainable growth within the sector.

In partnership with a big regional development bank the project contributes to improving financial literacy through DSIK’s simulation-based entrepreneurship training, the Micro Business Game.

The capacity development collaboration with microfinance institutions in Indonesia registered with the OJK will be progressively broadened.