Financial Sector Reform and Modernization Development Policy Loan

closed

Closed

The Indonesia Financial Sector Reform and Modernization Development Policy Loan aims to promote the development of a stable, efficient and inclusive financial sector to help the Government of Indonesia (GOI) achieve its medium-term economic development and poverty reduction goals. The operation supports policy and institutional reforms in three priority development areas: (i) reinforcing financial system stability; (ii) promoting financial sector diversification; and (iii) enhancing financial inclusion. While the loan is a stand-alone operation, it builds directly on the 2012 Financial Sector and Investment Climate Reform and Modernization DPL ('FIRM DPL'), which focused on business environment reforms as well. The amount for the loan is US$500 million. The social outcomes associated with Indonesia's economic transformation have been mixed, with a significant decline in poverty in parallel to a continued high degree of vulnerability. On one hand, growth helped reduce poverty through significant job creation. Twenty million new jobs were created between 2001 and 2011, 18 million of which were in urban areas, helping Indonesia to halve poverty from 24 percent in 1999 to 12 percent in 2012. On the other hand, about 65 million people hover just above the poverty line, and remain highly susceptible to shocks. Further, there remains the pressing need to improve not just the number but also the quality of jobs created.

FY17 - Financial Sector

World Bank Group

Project

Government