Shared Prosperity of Women Micro and Small Medium-Entrepreneur (MSME) in Rural Area in Indonesia

Women 2


Melitta Aroean

Melitta Aroean


IPMI International Business School

IPMI International Business School


Amelia Naim Indrajaya

Amelia Naim Indrajaya

Global Goals

1. No Poverty 4. Quality Education 5. Gender Equality 8. Decent Work and Economic Growth 10. Reduced Inequalities

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The journey was started from a small village called “Ciseeng”, Bogor, in West Java. It was established in 2010 starting in a cooperative form in order to help women entrepreneurs in Bogor, West Java.

Amartha is a Financial Technology Company that aims to help women micro-entrepreneurs in rural areas. These women are the people who were not served by banks or any other conventional financial institutions. Amartha has one objective: to improve women’s lives.

Further in 2016 the business entity form changed into “Peer to Peer Lending”. Through this form, the objective for Amartha was to link the Lenders and Borrowers (Borrower are called “Partners”).

The Partners are segmented into micro and medium entrepreneurs in rural areas that are operated by women. Currently Amartha operates in 3 regional locations: Java, Sumatra and Sulawesi. Amartha aims to open wide access to the financial services initiated through its operation. There is one main vision for Amartha which is to have more equitable prosperity in the life of women. The next question that needed to be answered: Why women? Because women have a multi derivatives impact. These efforts would not only have an impact on women’s personal lives as individuals but also have derivatives impact on her family, children, neighbors as well their surroundings. Amartha works with these women through partnering and mentoring programs.

“Helping women in rural villages grow their business is Amartha’s contribution to reducing the gap of development, ensuring female leadership can also flourish from every frontier of Indonesia.”

Amartha was established in 2010 as a micro-financing company in order to bridge micropreneurs with online potential lenders.


Amartha's Business Model is a Human Centre Design. Their mission is to contribute to the great social problem in Indonesia which is to open the access of financial service to all of the micro-entrepreneurs. The access in 2010 was very limited whereby only 36% of Indonesia’s micro-entrepreneurs had access to banking and/or financial services. The bottom line is, the business model and product that Amartha designed is to provide the solution to the root problem.

Based on the research with the third party (Worldbank), in Indonesia there are several challenges that micro entrepreneurs have. These challenges hinder these people to move forward:

1. Capital Access

2. Lack of Skills

3. Social Norms

4. Digital Adoption

Based on the above problems and looking from the Human Centric analysis, the solution for Amartha is to design a “Peer to Peer Lending” mechanism. The objective is to connect the rural micro-entrepreneurs with the lenders / investor. Whereby this investor is coming from the city (mostly millennials, technology savvy). Amartha builds a platform to bridge the micro entrepreneurs to get the funds from the lenders/investor. The borrowers won’t have to go through hardship to find lenders, and there’s also no need for the investor / lender to go to the rural area to help the micro-entrepreneurs and help with financial education. The lenders/investor can easily access the rural community in every region of Indonesia.

Amartha when creating products tp "Deliver Human Center design", the human product and human business is the end goal.

Innovation in Amartha applies to new products, business models, service,s and technology in Indonesia. Amartha is the first entity that focuses on financial empowerment to women in rural areas. Amartha takes a holistic approach which includes the area as below:

1. Design the financial products. Funding is provided to support affordable and flexible financial products for micro-entrepreneur women in rural areas. These women have limited access to the bank and conventional financial institutions and it was difficult to get a loan. The Program called “Tanggung Renteng” Responsibility, “These women would not apply their own loan on an individual basis, however, they will club in one group, which is called “Majelis”. They are required to pay the outstanding loan on weekly basis, so it would not be too heavy. If there is one of its members that could not afford to pay, then her friends in one group are responsible to pay the outstanding loan.

Not only funding, Amartha provides mentoring and training to all its partners to make sure the sustainability of their business. There are various types of training given by Amartha , for examples: Entrepreneurship Training, Health Hygiene, and Sanitation Training, Digital literacy training to help the partner to accelerate understanding of the smartphone, not only for social media purposes but also for business purposes.

2. Reduce the cost of transactions. When people are reluctant to use conventional financial services, it might be because it is expensive. Amartha created a” hub” in the villages. It has 3000 employees in 18 thousand villages. Amartha has the innovation to have "Banking at the doorstep", while Amartha will come to the village and offer the product to women.

3. Reduce the barrier of access. The requirement will be very simple, with no need for guarantees. It only requires an ID card and a light interview with Amartha’s field officers. Further Amartha assesses using technology that the Partner submits to assess their creditworthiness.

The Main Purpose for Amartha doing business is to create equitable Prosperous or equitable well-being within women. Amartha not only provides funding to their Partners, but also shares these three basic pillars:

1. Ethical Lending Practices. In action, no one will knock on the door harshly to follow up the overdue payment, and no harsh call to family and friends

2. Sustainable Financing

3. Women Empowerment

To ensure Amartha’s objective works accordingly along this pillar, Amartha adhered to 4 guidance principles:

1) Sustainable Development Goals

2) Environment, Social and Governance (ESG) Principles

3) Women Empowerment Principle (WEP)

4) Customer Protection Principle (CPP)

In terms of financial inclusion objectives, Amartha’s operation is dedicated towards achieving three main goals:

 Provision of affordable and flexible financial products

 Reduction of barrier to access financial services

 Reduction of cost in accessing financial services.

Amartha is the signatory of Women Empowerment Principle (WEP) as their commitment to continuously raise the bar and lead the way in promoting women empowerment in the private sector.

Departing from concerns of the Country’s problem, Amartha sees inequality. Many micro-entrepreneurs, of which more than 50% are operated by women in Indonesia, still need help. By looking at this, Amartha thinks on how to increase prosperity in Indonesia is through women. As through women, the ultimate impact is greater. Amartha is continuing to create innovation in the form of cooperatives into change into financial technology, also in its works aligning with several principles with setting some bars in order to achieve clear objectives.

The stakeholder involved in Amartha’s ecosystem are as follows:

1. Amartha team (i.e. employee)

2. External Stakeholder (i.e. worldbank that have similar focus in women empowerment). Together with worldbank, Amartha does the research which the result of can be implemented as one of the innovations.

3. Lenders (individual or group)

4. Borrowers

Amartha has some Customer Service functions to pay attention to the feedback given by the stakeholders. The innovation is clearly linkage with the sense of mission, purpose, and meaning. Amartha has identified the problem that further linkage to the product and business model that it created. This also leads to innovation that Amartha created and also links to the SDG objective.

Shared Prosperity of Women Micro and Small Medium-Entrepreneur (MSME) in Rural Area in Indonesia


The original idea to create such a product and business model are identified by its Founder “Andi Taufan Garuda Putra” – who initially saw prosperity and inequality as a big problem in Indonesia. He has the heart to increase the prosperity of micro-entrepreneurships operated by women in rural areas which not only impact the women as individual person but also have impacted her family, and other surroundings. Andi Taufan Garuda Putra is Founder and Chief Executive Officer of Amartha, a fintech P2P Lending that digitizes the microfinance sector and provides alternative channels to capital for the unbanked population in Indonesia. He grew the company from inception to its current form.

Amartha's motivation is for equitable well-being. For this reason, Amartha focuses its business on an inclusive economy. To achieve that, the most appropriate way in our opinion is through the empowerment of female micro-entrepreneur business. Because it is proven by empowering women, the positive impact will be very large.

“We consciously pick the balance between profit, people, and planet. We integrate impact and sustainability to core business activities” Andi Taufan Garuda Putra – CEO Amartha

Overall impact

The impact that Amartha wants to deliver is very clear. Amartha aims to design the impact directly from the Business Model. Their initial hypothetical from Amartha is when the women have sufficient working capital then it directly increases their revenue and further will increase their welfare. One of the examples of the Amartha’s research is that if the welfare increases then the wellbeing metrics will increase as well (for example: increase child education, their house is more decent, their toilet is more decent, the family is having nutritious food.)

In brief, the impact can be seen. The increased income of women entrepreneurs with incomes of less than 1 million per week can earn 3-7x higher. In total, the income of all women (approximately 870 thousand women in more than 18 thousand villages) has increased by an average of more than 10%. From these more empowered women, their families are more empowered as well. Their Children can also go to school, their neighbors can be hired into their business, etc. Amartha has now distributed its funding to more than 870 thousand small businesses which are 100% operated by women. From only small loans of Rp 1 - 5 million, now Amartha has distributed for approximately Rp 4.8 trillion and 17 provinces in Indonesia among 18,600 villages)

The Short term impact is to build women empowerment. It is expected that the funding they receive can create their entrepreneurship business in their local area. The Long term impact is the number of women entrepreneurs in their area. At this time there are already more than 870 thousand women that have been helped by Amartha. The aim is to have a larger impact on more women and their families and surroundings.

The concrete evidence suggests that this impact has occurred.

1. Achieves 1 or more of the UN Sustainable Development Goals

• SDG - 1 : No Poverty

o Help reduce poverty rate by improving income of the borrowers by 10% through provision of working capital and financial education

o Through provision of working capital loan and continuous mentoring for 50 weeks on average the income of Amartha’s borrowers during the pandemic increased by 10.5% and 265% for those in the lower-income brackets of less than Rp 4 million per month.

o Amartha’s focus of operation in more than 18,900 villages and rural areas in Indonesia helps the poor and vulnerable have equal rights to access affordable and flexible financial services.

• SDG - 4 : Quality Education

o Promote children and women education by ensuring education is our borrower’s top three priorities of their financial planning.

o Amartha’s focus of operation in more than 18,900 villages and rural areas in Indonesia helps the poor and vulnerable have equal rights to access affordable and flexible financial services.

o Based on our survey, women with their own personal income put children’s education as their number one priority on the list of their financial planning.

• SDG - 5 : Gender Equality

Support women’s leadership in micro-business and rural economy by ensuring that >75% loan disbursement goes to income-generating activities

o In 2020, 98% of Amartha’s loan disbursement went to income generating or productive purposes (working capital)

o By promoting women to have their own income and build personal assets, Amartha helps women to participate and lead in the economic life of their families.

o Access to digital financial products enhance the capabilities of our customers to use technology and information technology , which open opportunities to wider access of information and further empowerment.

• SDG - 8 : Decent work and economic growth

o Support employment and job creation in rural areas, by disbursing at least >75% of working capital in rural and peri-urban areas to stimulate jobs.

o In 2020, 85% of Amartha’s loan were disbursed in rural villages and peri-urban (district level) areas

o Provision of Amartha’s working capital loan helps promote growth of business in rural villages and improve employment. In 2020, more than 250,000 new entrepreneurs received Amartha’s working capital loan, of which 30% of them were able to hire additional manpower, creating jobs in their villages.

o Amartha is a local domestic financial institution, that contributes to promoting financial inclusion, where more than 680,000 entrepreneurs are empowered and 80% of them are new customers who have no previous access to banks or financial institutions.

o Amartha’s borrowers consist of 25.7% youth females under the age of 35 years old. In this sense, Amartha has promoted strategic action to drive youth employment from the village

• SDG – 10 : Reduce Inequalities

o Strengthen women’s economic capacity at the bottom 40% of the population by ensuring >75% borrowers are women.

o In 2020, 100% of Amartha’s borrowers were women

o On average, monthly income of Amartha’s borrowers from Rp 3,799,340 to Rp 4,197,924 (+10.5%) during 2020, while economic growth experienced a contraction of -2.07% as the pandemic hit.

o Amartha’s mission to improve access to finance for women in rural areas improves the capabilities of women from the lower income brackets and reduces the gap in their social, economic, and gender status.

• SDG – 12 : Responsible Consumption and Production

o Promote transparency and sustainability practices in the private sector by publishing annual impact reports.

o Since 2016, Amartha has been publishing annual impact report as public disclosures and promotion of sustainability practices in private sectors.

o Amartha also voluntarily became the signatory of UN Global Impact, International guiding principles to uphold best practices in sustainability.

o Furthermore, Amartha is also the signatory of UN Women’s Empowerment Principles (WEP), which shows our commitment in advancing the wellbeing of women through our business practices and corporate governance.

• SDG – 17 : Partnership For The Goals

o Actively engage with external stakeholders, such as development agencies, Governments, NGOs, and other civil society in promoting sustainability practices.

o Amartha builds partnerships with World Bank, UN, UN Women, Indonesian Governments, private sectors, Universities, and other stakeholders in promoting financial inclusion for women, environmental protection, and social impacts. These relationsihps promote the elements of partnership for sustainable development.

Business benefit

As a business entity, Amartha has profitability goals. However we believe that sustainable business can be also achieved by integrating value creation and improvement of wellbeing as part of our business process, this mindset has shaped the ways Amartha is doing business.

Peer-to-peer (P2P) lending is an online lending platform which also serves an alternative investing platform by bridging potential lenders and micro-business owners who require business funds. Amartha provides easy access for women in rural areas to receive business funds from urban lenders through financial technology so they can start their own business or expand existing business.

We believe an online P2P lending platform will push a more inclusive economic growth, economic equality, and a better chance to increase family welfare.

Amartha serves micropreneurs in rural areas which are inaccessible by financial services. Borrowers are strictly limited to women micropreneurs with funding inquiries starting from Rp1.500.000. All funds are channeled for microbusinesses across the nation.

Amartha provides benefits for all its stakeholders. For women partners, as borrowers, they will get funding and mentoring assistance to advance their business. The Potential borrower selection process is run using a credit score algorithm in order to assess borrower propriety according to business analysis and the borrower's personality.

For Lenders or investors, they will get a return from the proceeds of funding. Lenders will have access to credit score profile of potential borrowers for easier risk mitigation before decision making. Repayment is being updated real-time on a daily basis. Principle repayment and interest are liquid in nature and cashable anytime.

For Indirect relation organizations such as the government, they can also receive benefits as Amartha performance will support the government targets, especially in accordance with SDG objectives.

Social and environmental benefit

In terms of societal benefit, Amartha enables micro-entrepreneurs in villages to be funded by their investors in big cities, through platform, bridging access to finance for thousands of micro-businesses who were previously unbanked. Through our business model, we generate prosperity for Indonesia.

In terms of environmental benefit, Amartha is selected to accept on NPAP mandate “National Plastic Action Partnership”. The mandate orders to give the funding to the micro and medium entrepreneur for the plastic management waste business sector.

Carbon Footprint aims to be one of the company’s responsibilities as well.


Katrina Inandia, Head of Impact Amartha

Ana Nurhasanah, executive assistance

Photo of interviewee

Business information



Jakarta, Indonesia, ID
Business Website:
Year Founded: 2010
Number of Employees: 201 to 500

Amartha started its humbled journey from a small village in Bogor, West Java, with two branch offices in 2010. The Peer- to-Peer Lending (P2P) model was then introduced in 2016. Since then, Amartha has been able to grow exponentially by maintaining a good quality portfolio. Amartha channeled the funds from mostly urban lenders to women micro-entrepreneurs across villages in Java, Sulawesi, and Sumatra.

The amount of micropreneurs who had difficulties raising funds for their business due to limited access, income fluctuation, and no credit history was the beginning of our story. Amartha believes these micropreneurs can evolve to become quality borrowers with the right technology and the spirit of cooperation. Investing in microbusinesses is also proven to create a great deal of social impact.

Amartha believes the ease of funding access for micropreneurs will contribute to improving the well-being of the people categorized at the bottom of the pyramid, building economic resilience, and social justice for all.