Beyond Emergency Responses: Ensuring the Legacy of Market-Based Microfinance Expansion
The grant agreement included the creation of a Microfinance Innovation Fund to provide commercial funding to partner banks willing to expand financing for micro and small enterprises.
- The creation of a Microfinance Innovation Fund was a prominent feature of the Earthquake and Tsunami Emergency Support Project in Indonesia.
- To coopt success, before establishing the Fund, the project provided technical assistance to build the capacity of partner banks, created a Board for the Fund, setup guidelines for operations, extended loans and deposits at near-market rates, and partnered with PT. Permodalan Nasional Madani that assumed the role of Fund custodian.
- The Microfinance Innovation Fund is set to continue successful fund operations long after project completion.