If the Banks are Doing So Well, Why Can’t I Get a Loan?


Thursday, March 8, 2012, 4:10pm to 5:30pm


124 Mt. Auburn Street, Suite 200-North, Cambridge, MA

Jay RosengardRegulatory Constraints to Financial Inclusion in Indonesia
Jay Rosengard, Harvard Kennedy School

About the Seminar
This seminar will explore two paradoxes of Indonesia’s financial sector: 1) Indonesia has been a global leader in microfinance for the past 25 years, but access to microfinance services is declining; and 2) Indonesia’s commercial banks are liquid, solvent, and profitable, and the Indonesian economy has been doing well over the past decade, but small and medium enterprises are facing a credit crunch. Thus, although Indonesia is underbanked, most commercial banks have been unresponsive to unmet effective demand. These paradoxes are especially challenging given that the behavior of banks has been in their own short-term best interests, primarily because of the unintended consequences of Indonesia’s financial sector reregulation after the East Asian crisis and contradictory monetary policies, which have produced a prudentially sound but inefficient, narrow, and homogenized banking oligopoly. The seminar will also review possible policy responses to increasing financial exclusion in Indonesia.

About the Speaker
Jay K. Rosengard, lecturer in public policy at Harvard Kennedy School, has 35 years of international experience designing, implementing, and evaluating development policies in public finance and fiscal strategy, tax, and budget reform, municipal finance and management, intergovernmental fiscal relations, banking and financial institutions development, microfinance, and public administration. He has worked for a wide variety of multilateral and bilateral donors, as well as directly for host governments and private sector clients. Rosengard is director of the Mossavar-Rahmani Center for Business and Government’s Financial Sector Program, which focuses on the development of bank and nonbank financial institutions and alternative financing instruments. This includes microfinance, mainstream commercial banking, and wholesale financial intermediation. In addition, Rosengard is a faculty affiliate of both the Ash Center for Democratic Governance and Innovation and the Center for International Development. He also serves as faculty chair of four executive programs: FIPED (Financial Institutions for Private Enterprise Development), which focuses on sustainable and effective microfinance and SME (small and medium enterprise) finance; ComTax (Comparative Tax Policy and Administration), which addresses key strategic and tactical issues in tax design and implementation; VELP (Vietnam Executive Leadership Program), which is an innovative policy dialogue with senior Vietnamese leadership; and TRANSFORMASI (Leadership Transformation in Indonesia), which is designed to assist Indonesia in its decentralization initiatives.