IFC announced a $40 million senior loan facility to PT Radana Bhaskara Finance Tbk (Radana). The IFC-led financing package aims to develop the country’s micro, small and medium enterprises (MSMEs), and increase financing for women-owned MSMEs. 

Financing MSMEs in emerging markets like Indonesia is crucial because they serve as an engine for growth and job creation. According to “Women-owned SMEs in Indonesia: A Golden Opportunity for Local Financial Institutions,” a study commissioned by IFC in 2016, the MSME financing gap in Indonesia is $11 billion annually. The report highlights the challenges that MSMEs—particularly women-owned—face when accessing bank loans. Women in Indonesia contribute to job creation as well as nine percent of GDP growth, but when it comes to bank loans, they tend to be treated differently than men. 

The funding commitment is part of IFC’s broader efforts to foster private sector participation, increase access to finance for the underserved and help drive investments in Indonesia’s MSME sector. This financing package will enable Radana, a local multifinance company, to increase its lending for MSMEs, women entrepreneurs, students, and home renovation loans.