ILO Trains Indonesian Rural Banks to Boost Finance for Women Entrepreneurs

The International Labour Organization (ILO) is working with rural banks across Indonesia to improve access to finance for women-owned micro and small enterprises (MSEs), a sector seen as a critical driver of the country's economic growth.

Through the Promoting SME Enterprises through Improved Entrepreneurs' Access to Financial Services (Promise II Impact) project, the ILO has trained rural banks to adopt gender-responsive business development approaches that address the financial barriers faced by women entrepreneurs.

The initiative was highlighted during a two-day workshop held in Surabaya, East Java, in early February, bringing together 28 participants from 13 rural banks (BPRs) across West Java, East Java, Bali, West Nusa Tenggara and East Nusa Tenggara.

Representatives from key financial sector institutions—including the Indonesian People's Economic Bank Association (PERBARINDO), the Association of Local Government-Owned Rural Banks (PERBAMIDA), PERBAMIDA University and the Financial Services Authority (OJK)—also participated.

Gender-Responsive Banking for Women Entrepreneurs

During the workshop, participants were introduced to the ILO WE-Check Tool, a self-assessment framework that helps financial institutions review their policies and services through a gender lens.

The tool allows banks to evaluate key areas including:

• Leadership commitment to gender equality

• Workplace policies and practices

• Financial products and services for women entrepreneurs

• Outreach strategies to underserved groups

• Data collection systems to track gender outcomes

By identifying gaps and opportunities, financial institutions can develop practical strategies to expand access to financial services for women-led businesses.

Global Evidence Shows Strong Results

Sara Andersson, Technical Officer from the ILO Women's Entrepreneurship Development programme, shared global evidence demonstrating the impact of gender-responsive financial services.

Institutions that applied the WE-Check Tool reported a 178 percent increase in female clients and a larger share of women in their lending portfolios.

More than 150 organizations in 21 countries have used the tool so far, helping extend financial services to over 500,000 women entrepreneurs worldwide.

Women Play Key Role in Indonesia's Economy

According to Indonesia's Financial Services Authority (OJK), women represent nearly half of the country's more than 30 million micro, small and medium enterprises (MSMEs).

East Java alone hosts 4.58 million MSMEs, making it the second-largest regional hub for small businesses in the country.

"Improving access to MSME financing is essential to strengthening national economic resilience," said Horas V.M. Tarihoran, Director of Supervision of Financial Services Providers' Conduct, Education, Consumer Protection and Strategic Management Services at OJK East Java.

He also highlighted OJK Regulation No. 19/2025, which encourages financial institutions to expand inclusive financing for MSMEs while maintaining strong governance and risk management.

Rural Banks as Key Access Points

ILO officials stressed that rural banks play a crucial role in connecting women entrepreneurs to formal financial systems.

"Rural banks are often the closest formal financial institutions to women entrepreneurs in rural and peri-urban areas," said Djauhari Sitorus, Manager of the ILO Promise II Impact Project.

"Strengthening BPRs to become more gender-responsive means strengthening local economies and contributing to decent work," he added.

Strong Support From Partners

Representatives from UN Women Indonesia and Women's World Banking (WWB) also participated in the workshop, highlighting the economic benefits of gender-responsive finance.

Poppy Ismalina, Senior Advisor for Women's Economic Empowerment at UN Women Indonesia, noted that financial institutions adopting gender-sensitive approaches often see measurable improvements in performance.

"When financial institutions understand and respond to the realities of women entrepreneurs, they can expand outreach, improve portfolio quality and strengthen long-term sustainability," she said.

WWB's Aries Setiadi shared data from collaboration with Bank Rakyat Indonesia (BRI), which has expanded financing to 299,042 ultra-micro women entrepreneurs.

Pilot results showed that female banking agents achieved 1.7 times higher loan disbursement values and 2.4 times higher loan volumes compared to male agents.

Commitment to Institutional Change

At the end of the workshop, participating rural banks developed action plans outlining specific steps to improve gender responsiveness.

These plans included identifying priority target groups, defining objectives, assigning responsible teams and setting timelines for implementation.

Several banks also expressed interest in piloting the WE-Check Tool with support from the ILO.

Expanding Inclusive Financial Ecosystems

The workshop forms part of the ILO Promise II Impact project, supported by the Swiss State Secretariat for Economic Affairs (SECO).

The initiative seeks to strengthen inclusive financial ecosystems, improve value chain development and promote decent work.

By helping rural banks adopt gender-responsive strategies, the project aims to expand access to finance for women entrepreneurs and drive more inclusive local economic growth across Indonesia.