Microenterprise finance institutions of Indonesia and their implications for donors

The financial systems approach treats microenterprises as a market -- offering a product with attributes clients want at a price that covers costs. The approach aims for financial viability of lending institutions, and it stresses that savings are equal in importance to credit. The report describes principles of credit delivery that have proved effective with poor clients. It also examines the prospects for financial viability among the nongovernmental and financial institutions providing microenterprise finance. Suggestions are made on institutional support requirements, the role of donor organizations, and government policies to support growth of financial services for microenterprises. (Author abstract)