If The Banks Are Doing So Well, Why Can’t I Get A Loan? Regulatory Constraints to Financial Inclusion in Indonesia

DSpace/Manakin Repository

If The Banks Are Doing So Well, Why Can’t I Get A Loan? Regulatory Constraints to Financial Inclusion in Indonesia

Citable link to this page

 

 
Title: If The Banks Are Doing So Well, Why Can’t I Get A Loan? Regulatory Constraints to Financial Inclusion in Indonesia
Author: Rosengard, Jay K.; Prasetyantoko, A.

Note: Order does not necessarily reflect citation order of authors.

Citation: Rosengard, Jay K., and A. Prasetyantoko. 2011. If The Banks Are Doing So Well, Why Can’t I Get A Loan? Regulatory Constraints to Financial Inclusion in Indonesia. Asian Economic Policy Review, 6(2): 273-296.
Full Text & Related Files:
Abstract: Indonesia’s financial sector has two paradoxes: 1) Indonesia has been a global leader in microfinance for
the past 25 years, but access to microfinance services is declining; and 2) Indonesia’s commercial banks
are liquid, solvent, and profitable, and the Indonesian economy has been doing well over the past decade,
but small and medium enterprises are facing a credit crunch. Although Indonesia is underbanked, most
commercial banks have been unresponsive to unmet effective demand. The behavior of banks has been in
their own short-term best interests, primarily because of the unintended consequences of Indonesia’s
financial sector reregulation after the East Asian crisis and contradictory monetary policies, which have
produced a prudentially sound but inefficient, narrow, and homogenized banking oligopoly. Indonesia
should not respond to financial exclusion by artificially pumping out and administratively allocating more
credit. Instead, it should promulgate smart regulation so that banks maintain their sound risk management
without pursuing non-competitive and non-inclusive business practices.
Published Version: http://dx.doi.org/10.1111/j.1748-3131.2011.01205.x
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:8705903
Downloads of this work:

Show full Dublin Core record

This item appears in the following Collection(s)

 
 

Search DASH


Advanced Search
 
 

Submitters