IFC, Mastercard, Coca-Cola Europacific Partners Indonesia, and N-Frnds Collaborate to Provide Working Capital Support to Indonesian Micro Traders

Kolaborasi dengan N Frnds v3


Amelia Naomi

As many as 5,000 Indonesian micro-retailers, the majority led by women, are set to gain greater access to finance and modernize their business operations through an innovative pilot initiative providing working capital support for a key sector at a time when the economy is being hit hard by the COVID-19 pandemic.

IFC, a member of the World Bank Group, has partnered with Mastercard, Coca-Cola Europacific Partners Indonesia (CCEP Indonesia) and leading emerging market B2B e-commerce platform N-Frnds to develop and pilot an integrated digital payments and scalable financing solution that leverages the relationship between fast moving consumer goods companies (FMCG) and distributors, wholesalers and micro-retailers, micro-retailers to digitize transactions. The financing solution is based on a first of its kind consignment program for micro-retailers in emerging markets, enabling them to build up a credit history, giving them better access to finance and empowering them to sustain and grow their business, even during these difficult times. 


“Micro-retailers play a critical role in Indonesia, providing jobs and reaching people and places large retailers cannot. But their growth and survival are hampered by a lack of access to finance that is exacerbated by the COVID-19 pandemic,” said Rana Karadsheh, IFC Regional Industry Director Manufacturing, Agribusiness and Services. “This partnership will provide much-needed finance at a critical time while piloting an innovative approach to supporting micro-retailers, including helping them to modernize.”   


While the initiative is set to be initially rolled out across Indonesia’s main island of Java, it is seen as having broader implications for the largely unbanked micro-retailer segment that includes an estimated 3.5 million small retail shops, restaurants, and cafes - known in Indonesia as warungs - in operation across the country. Micro-retailers represent 60 to 70 percent of Indonesia’s retail sector, but financial institutions face challenges in serving them due to insufficient data on financial performance and credit history. Rejection rates by financial institutions average 45 percent for micro, small, and medium enterprises compared to 17 percent for corporates.

“Access to finance has been a major obstacle for MSMEs in Indonesia, and the COVID-19 pandemic has created an even more pressing need to develop solutions and bring together expertise that would help these micro-retailers get digitized, get capital, and get paid,” said Safdar Khan, Division President, Southeast Asia Emerging Markets, Mastercard. “The partnership with N-Frnds, CCEP Indonesia and IFC will help ensure these micro businesses can continue to drive forward a sustainable and inclusive economic recovery,” he said, adding that the majority of the micro-retailers that stand to benefit from this initiative are women-led. “Driving forward women’s economic advancement isn’t just of benefit to them, but for the whole economy.”

The launch of this initiative comes after the Mastercard Women's Entrepreneur Development Index 2020 showed that compared to the previous year, Indonesia had made more progress in advancing entrepreneurialism among women than any other Southeast Asia nation.


“Coca-Cola Europacific Partners Indonesia is excited to partner with IFC, Mastercard and N-Frnds which will allow the company to provide credit facilities to smaller outlets in Indonesia,” said Jorge Escudero, President Director of Coca-Cola Europacific Partners Indonesia and PNG. “Through the partnership, the ability to select credit options that are suitable for the customers will allow these smaller outlets to grow their businesses and be part of the value ecosystem that CCEP Indonesia is creating among the traditional trade outlets,” he said.

“This partnership is a true game-changer in the market, driving efficiencies throughout the value chain and enabling micro-businesses to benefit from financial solutions that were previously well beyond their reach,” said Dorron Mottes, CEO and founder of N-Frnds. “This will provide a financial life-line to the millions of small businesses who have been severely impacted by the current pandemic and now have an opportunity to not just survive but also to grow their business.”

IFC, Mastercard and N-Frnds have jointly committed over $2 million to fund the pilot, with IFC contributing $750,000, while CCEP Indonesia is providing valuable consignment terms, as well as discounts, and promotions channeled through N-Frnds. The initiative is expected to unlock growth for micro-retailers and create business opportunities for FMCG companies and banks supporting the scaling and replication of this innovative financing solution.