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MICROFINANCE IN INDONESIA: BETWEEN STATE, MARKET AND SELF-ORGANIZATION

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In countries such as Indonesia, where access to formal finance by small farmers and microentrepreneurs is limited, self-help groups are important providers of financial services. In light of state restrictions imposed on the independent organization of society, self-help groups are also important elements of the 'third sector of societal self-organization, through which their members improve their participation in deve- lopment. The double character of these groups as self-help organizations and finan- cial institutions has evoked the strategy of Linking Banks and Self- Help Groups. This approach has been implemented in Indonesia in order to establish business relationships between commercial banks, rural banks, non-government organizati- ons and self-help groups. Access to outside credit increases the service capacity of financial self-help groups. Substituting outside debt for internal savings, however, undermines the groups' self-reliance and financial health. In contrast to the common assumption that peer monitoring makes self-help groups good borrowers, the study suggests that unprecedented amounts of outside credit may threaten the groups' viability both as financial institutions and self-help organizations. The relation bet- ween self-finance and outside credit is seen as the core of the groups' institutional development and viability and, therefore, becomes a major theme of the study. The groups used different self-finance models, which predicated the impact of outside credit on their financial development. Development agencies are called upon to re- spect the importance and autonomy of financial self-help groups as self-organized providers of financial services.

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Availability

10000433

332.1 HOL m

RLC MM (Rak Buku Umum)

Available

Detail Information

Series Title

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Statement of Responsibility

Detlev Holloh

Call Number

332.1 HOL m

Publisher

New Jersey : Transaction Publishers., 1998

Collation

ix, 260 p. : ill ; 23cm.

Language

English

ISBN/ISSN

3-8258-3909-5

Classification

332.1

Content Type

-

Edition

-

Subject(s)

Microfinance
Buku Umum
Markets

Specific Detail Info

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