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Bina Artha

Inclusive finance – Case study (photo)

What challenge was the inspiration for the project?

Indonesia has one of the highest level of financial exclusion in Asia. Approximately 50% of the population does not have access to financial services, such as a savings account or small loans. This has a big impact on the quality of people’s lives.

As a financial institution Bina Artha wants to address this problem. And it wants to do more than provide loans for entrepreneurial activities. An example is its sanitation loan. 40% of the population of 100 million people in Indonesia still has no access to proper sanitation because they simply cannot afford it. As a result, many use makeshift facilities where they can find them.

What was your innovation that addresses this problem?

Bina Artha has recently started to offer a sanitation loan for an in-house toilet. Besides simply providing funding, they also help borrowers to set up a business in order to be able to pay back the loan and ultimately to further improve their long term living conditions.

What impact has Triodos Bank had on the business?

The loans provided by Triodos Fair Share Fund and Triodos Microfinance Fund helps Bina Artha to increase its outreach. Loans are in local currency which means that Bina Artha doesn’t need to carry currency risk. Thanks to these loans Bina Artha has been able to expand its outreach to 226,000 clients via a network of 227 branches. 99% of its clients are women. While 50% of the households it serves, live below the poverty line of USD 2 per day.

The organisation’s areas of operations are spread over Java, with a focus on rural areas. It plans to expand to other parts of Indonesia as well.

What impact has your business had on the sector it works in?

Bina Artha fulfils a key role within the financial sector in Indonesia through its mission to provide specialised financial services to Indonesia’s economically active, low income and largely female population in a fair, transparent, efficient and sustainable manner.

What impact has the business had on the community?

Bina Artha operates mainly in rural areas where about 70% of its clients live. These areas are home to a huge unmet demand for basic financial services and products. The institution is well rooted in the communities it serves and hires all its staff locally. New products are developed with a keen sense of the client’s needs, as the recently launched sanitation loan shows.

How does Triodos Bank share the vision behind the project?

Triodos Bank has worked together with Bina Artha since 2013, through its inclusive finance funds. Triodos Bank shares the same vision as Bina Artha; to increase financial inclusion in the country and to reach out to those traditionally excluded.

Both organisations recognise the importance of developing a best practice model Microfinance Institution that contributes to the development of an inclusive financial sector. Because organisations like this one are an important driver for long term sustainable development.