Indonesia is the worlds largest Muslim country. More than 60 percent of young people are unemployed, even more in rural areas.

Youth and Access to Microfinance in Indonesia Study

Indonesia

Youth Employment, Entrepreneurship and Investment Program.

ImagineNations is playing a key role in the design and documentation of a large-scale youth investment initiative in Indonesia. The overall program framework is called BEKERJA (which means "working" in the local language) and will improve the government's ability to deliver market oriented skills training to young people across the country using a public-private partnership approach. ImagineNations has committed significant time, energy and resources toward being a catalyst and facilitator in working with the Government of Indonesia and the country leadership of the World Bank through a multi-ministerial task force chaired by the Office of the Vice President to design a large-scale actionable strategy leveraging more than $200 million toward youth employment and enterprise development with full support of both the Indonesian President and Vice President, as well as the support of leading business families, for this program.

BEKERJA will increase employment opportunities for out-of-school youth by improving the incentives for private training providers to deliver relevant and high quality training and to link their graduates to jobs. The program will also enhance the opportunities for youth entrepreneurship and self-employment by providing greater access to loans and other forms of capital, along with business development services and other financial products and services.

This initiative represents the largest single country-level investment ever made by the World Bank and development partners, such as the International Labour Organization and others, toward youth development and employment. The Government of Indonesia has already approved the proposed framework, and the World Bank board is expected to take final action in 2009 when the detailed implementation strategy is presented.

A Youth "Window" in Commercial Banks & Microfinance Institutions.

In addition to the World Bank-Government of Indonesia-ImagineNations initiative, ImagineNations is also partnering with investors to establish a large-scale, commercially viable retail bank targeting underserved rural youth, factories with a largely youth workforce, and youth migrant workers.

Over time, the Youth MicroBank would provide financial access to at least 10 percent of Indonesia's 4 million underserved youth-led MSMEs through 1,000 branches across the country, and in hiring and training up to 9,000 unemployed youth to help run its operations and raising $200 million over several years toward working capital. This initiative would be complemented by BEKERJA in that the MicroBank could 1) provide loan guarantees as needed; and 2) invest in systems to provide business development services to the youth customers of the bank.