ILO Reaffirms Commitment to Financial Inclusion to Strengthen MSMEs in Indonesia

Speaking at the forum, Djauhari Sitorus, Project Manager of ILO PROMISE II IMPACT, stressed that financial inclusion must go beyond access alone.

The International Labour Organization (ILO) has reaffirmed its commitment to advancing financial inclusion in Indonesia as a key strategy to strengthen economic resilience and support the transformation of micro, small, and medium-sized enterprises (MSMEs), particularly micro and small entrepreneurs and informal workers in rural areas.

This commitment was highlighted during a media briefing held in Jakarta on 11 December, where the ILO emphasized that inclusive access to financial services is essential for helping MSMEs formalize, integrate into rural value chains, and create decent and sustainable employment opportunities. The initiative aligns closely with Indonesia’s national development agenda, which prioritizes sustainable economic growth through expanded access to formal and digital financial services.

Speaking at the forum, Djauhari Sitorus, Project Manager of ILO PROMISE II IMPACT, stressed that financial inclusion must go beyond access alone. He noted that within the framework of the ILO Decent Work Agenda, financial inclusion is about improving financial health, productivity, income stability, and enterprise resilience. According to him, when MSMEs, farmers, and informal workers are connected to formal financial systems, they become better equipped to manage risks, expand operations, and improve livelihoods.

The Financial Services Authority (OJK) echoed this perspective, underscoring the importance of expanding safe, responsible, and inclusive financial services, especially for small enterprises and farmers in rural areas. OJK highlighted digitalization as a critical enabler, particularly through Alternative Credit Scoring (ACS) mechanisms. Djoko Kurnijanto, Head of the Department of Regulatory and Licensing for Financial Sector Technology Innovation, Digital Financial Assets, and Crypto Assets at OJK, explained that digital transaction records—such as those from e-commerce platforms and mobile phones—allow financial institutions to assess creditworthiness even when businesses lose physical assets due to disasters or shocks.

In support of this approach, the ILO and OJK have jointly developed a number of digital financial inclusion initiatives, including a dairy value chain ecosystem powered by an Enterprise Resource Planning (ERP) system integrated with ACS. This model improves access to finance for smallholder dairy farmers while strengthening productivity and stimulating regional economic growth.

The Swiss State Secretariat for Economic Affairs (SECO) also shared lessons from the Promoting Small and Medium Enterprises by Enhancing Their Access to Financial Services Phase 2 (PROMISE II IMPACT) project. The initiative has expanded affordable financial services by strengthening value chain ecosystems across three priority sectors—dairy in West Java, seaweed in Sumba, and patchouli in Aceh—while modernizing local financial institutions.

Through PROMISE II IMPACT, around 6,000 MSMEs accessed financing worth IDR 167 billion via Rural Banks (BPR) and Regional Development Banks (BPD). This was supported by ILO-led interventions such as the deployment of a Mobile Loan Application, upgrades to core banking systems, and the development of a Loan Origination System (LOS). In addition, 3,610 MSMEs utilized savings and deposit services totaling IDR 20 billion, enabling better investment planning and financial security.

Ariadirja Martoni, Deputy Head of SECO Indonesia, highlighted the importance of multi-stakeholder collaboration in achieving these outcomes. He reaffirmed SECO’s commitment to strengthening a sustainable financial inclusion ecosystem and working with the ILO on further assessments and the design of the next phase of the program.

Indonesia’s Coordinating Ministry for Economic Affairs commended the ILO for raising awareness of formal financial access at the community level. The ministry indicated that PROMISE II IMPACT initiatives will be integrated into the Regional Financial Access Acceleration Teams (TPAKD) framework to ensure continuity and scalability. According to Erdiriyo, Assistant Deputy for Financial Inclusion Enhancement, these programs are seen as models for broader national adoption.

Concluding the discussion, the ILO emphasized that financial inclusion is central to social well-being and inclusive labour markets. When financial services are aligned with decent work principles, the benefits extend beyond enterprise growth to improved social protection, job creation, and long-term economic stability.

Looking ahead, the ILO reaffirmed its commitment to working closely with the government, financial institutions, and development partners to advance financial inclusion as a catalyst for a more equitable, resilient, and sustainable economy in Indonesia.