Reconstruction and Development of the Microfinance System in Nanggroeh Aceh Darussalam (NAD)

This paper informs about a microfinance promotion project in the province of Nanggroeh Aceh Darussalam (NAD), that aims to increase the number and volume of microfinancial services accessible to the lower income segments of the population. The paper states that:

• The project addresses non-existence/low quality of supply of microfinance services after the tsunami;
• There is need for a quick, flexible and actionable project to kick-start the process of re-building the financial infrastructure in the NAD province;
• The project would encompass the following activities:
  • Strengthening the capacities of regional supervision agencies and other institutions involved in the reconstruction and promotion of microfinance institutions (MFIs);
  • Building additional capacity for coordination, regulation and supervision in the regional "Bank Indonesia" office;
  • Increasing the number and service quality of MFIs in the province in order to target the "People's Credit Banks";
  • Strengthening thrift and credit cooperative societies or providing assistance in creating them;
  • Collaborating with commercial banks and with women groups.

The paper concludes that the initiative would start at the earliest possible date with:

• The identification and credit appraisal of the three first applicant microfinance institutions;
• The compilation of an inventory of locations where thrift and credit co-operatives could be newly established;
• A study in the remote districts of the province to assess the feasibility of collaborating with the National Family Planning and Welfare Programme (BKKBN).