Amartha, an Indonesian microfinance technology company, has secured US$ 55 million in a loan facility aimed at improving financial access for women entrepreneurs in the nation’s rural areas.

The funding is part of a broader syndicated loan of up to US$ 199 million, led by the International Finance Corporation (IFC), a member of the World Bank Group.

The US$ 55 million portion of the loan comes from three development finance institutions.

This includes Swedfund, which committed US$ 25 million; Finnfund, which provided US$ 15 million; and the Belgian Investment Company for Developing Countries (BIO), contributing US$ 15 million.

Proceeds from this investment will be directed entirely towards supporting women borrowers, particularly microentrepreneurs in regions where obtaining finance is most challenging.

Indonesia’s micro, small, and medium-sized enterprise (MSME) sector employs 97% of the workforce but faces an estimated financing shortfall of US$ 21 billion.

Women entrepreneurs, especially those operating outside of Java, experience the most significant funding gaps and often lack access to formal financial services, leading them to rely on informal lenders with high interest rates.

Amartha aims to address these challenges by offering loans with sustainable terms, including affordable capital without requiring collateral, and by providing access to finance for individuals with limited credit histories.

The company uses a digital financial infrastructure and a cooperative group lending model.

In addition to financial services, Amartha is collaborating with the Indonesian government on digital literacy training for rural villagers.

This initiative is designed to help integrate micro-entrepreneurs into the digital economy, thereby increasing their competitiveness and resilience.

Featured image: Edited by Fintech News Singapore, based on image by thanyakij-12 via Freepik