Micro Credit: Case of Bank Rakyat Indonesia
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Code : SEP0002
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Region : Indonesia
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Introduction: Since ages, global banking industry was biased against the loans extended to poor individuals living in rural areas. Most commercial banks and other financial institutions considered lending to the poor as ‘unbankable’ and ‘uncreditworthy’. They shied away from microlending, which they deemed as costly and labour-intensive exercise with little profit. Organized financial market thus neglected this segment .The poor were left with limited alternatives such asmoneylenders, who charged high interest rates or they were simply denied access to investment.2 Thus, Grammena Banks and other similar Micro Financing Institutions (MFIs) were set up to bridge the gap and provide resources to the poor for revenue generating purposes... |
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