In 2015, PT Permodalan Nasional Madani/PNM (Persero) initiated the establishment of Mekaar, a state-owned financing product targeting the pre-prosperous micro business sector. Among all the local organizations that provide microcredit service for the poor, Mekaar is considered as the nearest to the poor, since the program is targeted productive poor women with a credit amount of only IDR2 million (around US$150 in average) per person. With its unique peer-lending model, Mekaar has successfully reached more than 1,300,000 customers within two years of its establishment. The peer-lending model was originated from microcredit practice in Bangladesh; however, PT PNM has been successful in adjusting the peer-lending model with Indonesian culture and market through their Mekaar programs.
In this article, we examine how Mekaar penetrates Indonesian pre-prosperous market with ultra microfinancing. The information presented in this article is collected primarily from field observation to several Mekaar’s branches and interview with the key person in those branches. First, we presented an overview of PT PNM, an Indonesian state-owned company that created Mekaar program, including its vision and mission. Then, we evaluate Mekaar’s loan product and how PT PNM satisfies the funding needs for Mekaar program. We also evaluate characteristics of Mekaar’s target market, Mekaar’s peer lending model, and the role of Account Officer as a facilitator between the lender and the borrowers in Mekaar’s case. Finally, we evaluate the impact of Mekaar’s program and provide consideration related to future planning of Mekaar.
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