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Jakarta Post

Multiple loans make borrowers highly indebted

  • The Jakarta Post

Jakarta   /   Thu, October 6 2016   /  09:33 am

Fifty-nine percent of micro borrowers may be indebted as they face difficulties managing their finances to repay their mounting loans, according to a recent survey conducted in four cities in West Java.

The survey, carried out by financial inclusion consulting firm MicroSave in cooperation with Indonesia Financial Access Forum (Pakindo), found that 87 percent of survey respondents are taking more than one loan.

They are asking micro lenders to be prudent in disbursing loans considering the high rate of take on loans that could negatively affect the borrowers’ ability to repay. The survey had 241 participants in Sukabumi, Bogor, Subang and Cianjur.

“It will endanger the micro finance industry and eventually hinder small and medium enterprises from growing,” MicroSave manager Grace Retnowati said on Wednesday.

The survey was conducted amid growing efforts ...