A new study has shown that access to financing can significantly enhance the income of small and medium enterprises (SMEs), with these projects achieving an income increase of up to 63%. These findings were published in the 2025 Sustainability Report by Amartha, which noted that 89% of supported projects experienced income growth after receiving financial assistance.
Data indicates that approximately 2.3 million out of 3.9 million small and medium projects in Indonesia, spread across more than 50,000 villages, have benefited from this support. These results reflect the importance of financing in enhancing economic growth at the local level.
Event Details
Andy Tavan Garuda Putra, founder and director of Amartha, stated that inclusive financing not only opens doors to capital access but also contributes to strengthening the ecosystem for grassroots enterprises. He emphasized that this financing acts as a catalyst for empowering entrepreneurs to grow and improve their living standards.
Nailul Huda, director of the Center for Economic and Legal Studies, pointed out that enhancing access to financing is a key factor in boosting the economic movement within the community. He explained that the emergence of financial technology, including online loans, has contributed to increasing financial inclusion by 41.5% in countries that adopted these technologies compared to those that did not.
Background & Context
Historically, small and medium enterprises have represented an important part of the Indonesian economy, providing job opportunities and contributing to economic growth. However, these enterprises have faced significant challenges in obtaining the necessary financing for growth and expansion. In recent years, the Indonesian government and the private sector have focused on improving access to financing through various initiatives, contributing to a change in the economic landscape.
This study is part of ongoing efforts to enhance financial inclusion in Indonesia, as the government seeks to integrate more individuals and projects into the formal financial system. Improving access to financing can lead to better living standards and increased productivity within the community.
Impact & Consequences
The results demonstrate that inclusive financing can have positive effects on the local economy, contributing to increased income and improved living standards. Additionally, this type of financing enhances the ability of small enterprises to compete in the market, leading to the creation of new job opportunities and stimulating economic growth.
Furthermore, increasing financial inclusion through digital financing can help reduce economic and social gaps, contributing to sustainable development. These results highlight the importance of investing in financial technology as a means to promote economic growth in developing countries.
Regional Significance
Indonesia's experience in promoting financial inclusion through inclusive financing can serve as a model for Arab countries. Many Arab nations face similar challenges regarding financing for small and medium enterprises. Improving access to financing can contribute to enhancing economic growth in the region, helping to reduce unemployment rates and increase economic stability.
In conclusion, enhancing access to financing for small and medium enterprises is a vital step towards achieving sustainable development in any economy. Successful experiences like those witnessed in Indonesia can inspire Arab countries to explore innovative solutions to promote financial inclusion and achieve economic growth.