Small Business Loans in Indonesia
Top banks in Indonesia are seeing the profit potential in microloans or small business loans and they are rapidly expanding their microlending branches across the archipelago. These services are usually handled through charitable groups, government programs and specialty-finance companies in many countries, but in Indonesia the biggest banks like Mandiri and Danamon are leading growth in this market.
Danamon has calculated that 60% of small businesses in Indonesia are currently underserved by the country's banking system. Microlending has expanded too quickly in countries like India, triggering a debt crisis in that country, yet that hasn't dampened the global enthusiasm for the business. It is being viewed as a new driver of investment in Indonesia, where the ratio of loans to GDP remains below 30%. That's lower than in any other Asian country; in Singapore, Malaysia and China this ratio is above 100%.