Finnfund invests in Amartha, improving access to finance for women in rural Indonesia

Development Finance Institutions Swedfund, Finnfund, and the Belgian Investment Company for Developing Countries (BIO), have jointly provided a loan of 55 million US dollars to Amartha, an Indonesian microfinance fintech company, to drive financial inclusion for women entrepreneurs. The loan is part of a broader syndicated facility of up to 199 million US dollars, led by the International Finance Corporation (IFC), a member of the World Bank Group.

The initiative will support Amartha’s mission to connect underserved micro-enterprises with affordable capital, leveraging technology for greater impact. Indonesia’s MSME sector employs 97% of the workforce but has an estimated financing gap of 21 billion US dollars. Of the 44 million micro-enterprises in Indonesia, women entrepreneurs, particularly those operating outside of Java, face the largest financing gaps. These businesses often lack access to formal financial services and instead rely on informal lenders with excessive interest rates.

Amartha addresses challenges faced by women-led micro-enterprises in rural areas by providing loans with sustainable terms, including affordable capital without collateral, and enabling access to capital for individuals with limited credit history.

“Swedfund’s investment will enable Amartha to reach women entrepreneurs in rural areas with financial resources through responsible lending, boosting local economic stability and growth. By empowering these women, Amartha helps reduce rural-urban disparities, increase employment opportunities, and supports digital innovation and capacity building”, said Jane Niedra, Investment Director for Financial Inclusion at Swedfund.

Amartha is a leading microfinance technology platform that provides a digital financial infrastructure for the economy at the grassroots level through a cooperative group lending model. By connecting women to capital markets, Amartha is helping to reduce the gender gap in labour force participation and stimulate local economies.

“Finnfund finds it important that Amartha encourages its group loan customers to accrue savings in addition to providing micro loans. It has recently developed a new app, AmarthaFin, whereby Amartha’s customers can become micro-lenders to other group loan borrowers. With AmarthaFin, borrowers can generate more income”, said Ulla-Maija Rantapuska, Senior Investment Manager at Finnfund.

Amartha’s ongoing digital transformation, in partnership with the Indonesian government, includes digital literacy training for rural villagers. This initiative is important for integrating micro-entrepreneurs into the digital economy, increasing their competitiveness and resilience.

“Digital payments and e-wallets are powerful tools for financial inclusion, especially in rural communities where traditional banking infrastructure is limited. Through our investment in Amartha, we aim to accelerate the adoption of secure and accessible digital financial services, empowering women entrepreneurs to participate fully in the digital economy and manage their finances with greater autonomy and transparency”, said BIO’s CEO, Mr Joris Totté.

Proceeds from the investment will be fully directed to supporting women borrowers, particularly rural microentrepreneurs in areas where financing gaps are widest and most difficult to fill. Of the 55 million US dollars committed, Swedfund is committing USD 25 million, Finnfund USD 15 million, and BIO USD 15 million.

More information:
Ulla-Maija Rantapuska, Senior Investment Manager, Finnfund
tel +358 41 536 5631, ulla-maija.rantapuska@finnfund.fi

Media contact:
Valpuri Mäkinen, Communications and Marketing Manager, Finnfund
tel +358 50 384 2105, valpuri.makinen@finnfund.fi

About Amartha
PT Amartha Mikro Fintek (Amartha) has a mission to improve the welfare of the grassroots segment, through digital financial services for the grassroots segment. Founded in 2010, Amartha is now growing to build a microfinance ecosystem through capital loan, risk segmentation and payment services. Amartha advances the bottom of the pyramid by increasing the competitiveness of MSMEs. Thus, we empower more women’s MSMEs, create jobs and build more inclusive economic growth. As of September 30, 2024, Amartha, which is licensed and supervised by the Financial Services Authority (OJK), has disbursed working capital loans of more than 23 trillion rupiah to 2.7 million MSMEs, of which more than 90 percent are led by women, spread across more than 50,000 villages throughout Indonesia.

About BIO
The mission of the Belgian Investment Company for Developing Countries (BIO)is to promote the establishment of a strong private sector in developing and emerging countries, to enable them to access growth and sustainable development, within the framework of the Sustainable Development Goals. BIO was created in 2001 with the Belgian Federal State as sole shareholder. Its ultimate goal is to help strengthen the private sector in developing countries.

About Finnfund
Finnfund is a Finnish development financier and impact investor. We build a sustainable future and generate lasting impact by investing in businesses that solve global development challenges. We invest 200–250 million euros in 20–30 companies in developing countries each year. Our focus sectors include renewable energy, sustainable forestry, sustainable agriculture, financial institutions, and digital infrastructure and solutions. Today Finnfund’s investments, commitments, and investment decisions total about 1.23 billion euros, half of them in Africa. The company has 97 employees based in Helsinki and Nairobi.

About Swedfund
Swedfund is Sweden’s development finance institution with the mission to reduce poverty through sustainable investments in developing countries. Swedfund has two instruments to fulfil its mission: sustainable investments in the private sector and technical feasibility studies through the Project Accelerator targeting critical infrastructure in the public sector. Swedfund’s investments contribute to the creation of decent jobs and increased access to essential products and services such as electricity and food. Swedfund is a long-term investor and is additional and catalytic through its investments and by mobilising private capital.