Promoting Female Migrant Workers' Access to Finance through the National Community Empowerment Program or Program Nasional Pemberdayaan Masyarakat (PNPM)

Improving financial services offered to migrant workers in Indonesia
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This study analyzes issues related to access to finance for female migrant workers (FMW) in Indonesia.

Most FMWs from Indonesia work in countries in the Middle East and Asia. Banks provide savings accounts and handle transfers, but do not lend to FMWs or their families. There are few tailored products for FMWs in the market, and recruiting agencies and MFIs are the main sources of loans for FMWs. Provision of improved financial services to FMWs is constrained by high perceived level of risk, lack of transparency among recruiting agencies and high costs.

The lack of an efficient one-stop shop for FMW financial services combined with the low financial literacy of FMWs and their families adds to their overall lack of bankability. Recommendations include:

  • Financial literacy training for FMWs and their families;
  • Building effective monitoring mechanisms for recruiting agencies to ensure quality and transparency;
  • Building partnerships between MFIs and banks;
  • Product development around FMWs;
  • Financial and technical support for MFIs engaged in pioneering product delivery for FMWs.