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MICRA, or the Microfinance Innovation Center for Resources and Alternatives, is an Indonesian foundation focused on development of the microfinance sector. MICRA’s mission is to build the institutional strength and outreach of the Indonesian microfinance sector, by providing a full range of high-quality, best-practice technical inputs and support to all industry stakeholders, in a sustainable and demand-driven manner. As an independent support center, MICRA is committed to promoting innovations, transparency, and improved outreach to the poor and ever-improving performance in the microfinance industry.
MICRA was founded by Mercy Corps in early 2006 to institutionalize its joint “Commercial Linkages Pilot Project” with IFC PENSA. MICRA currently includes three technical units: 1) Ratings and Appraisals; 2) Technical Assistance; and 3) Research and Innovations. In August 2006, MICRA opened its first branch office in Banda Aceh, where it has on-going programming for a range of clientele. |
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The Indonesian microfinance sector is one of the largest in the world, encompassing over 50,000
institutions, including community banks, rural banks, cooperatives and credit unions. Despite the scale, more than 40 million people still lack access to financial services, mainly in rural areas and urban slums.
The PAC program was initiated by MICRA foundation in order to build MFI outreach to the poor. PAC strongly believes that everyone, including those with low or no income, deserve access to financial services. At present, many of those people are not served by commercial banks and only few microfinance institutions reach out to this market segment. A recent MICRA study revealed that only
a third of 450 MFIs surveyed provide significant services to the poor.
In Indonesia, poverty remains a driving factor. The following figures illustrate this:
- Over 110 millions of people are living with income between US$1 and US$2 per day; another 17 millions live on less than US$1 per day.
- Nearly 30 million of elementary school children are suffering from moderate to severe anemia.
- There are 30 million unemployed people and 37% of population was unemployed in 2006.
- As many as 38.5 million Indonesians are self-employed, comprising over 40% of those employed.
- Of more than 43 million of micro and small enterprises in Indonesia, only less than 13% have access to commercial sources of finance.
As a program, PAC focuses on identifying, promoting and linking pro-poor MFIs to recources. The program is integrated and serves as a center for learning. It also acts as center of activities for pro-poor MFIs to develop their outreach and effectiveness. PAC enables MFIs to receive access to various resources so that they can grow and share experiences. PAC also promotes pro-poor models to other MFIs interested in working on the microfinance market. Best practices and tools will be documented and disseminated through newsletter, website and conferences.
Managed by a team within MICRA, PAC fuses its resources with internal support from Mercy Corps to
provide direct services to up to 500 pro-poor MFIs in the next five years. It will build market awareness among all MFIs about viable pro-poor products and approaches to increase overall service to underserved market segment. Eventually, effective and sustainable MFI financial services are hoped to lift millions of Indonesians living in poverty. |
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