What does the Paradigm Shift from “Microfinance” to “Financial Inclusion” Mean for the Poor? : The Case of Indonesia

The financial inclusion programs must be continuously stimulated in order to accelerate the expansion of access to financial services for disadvantaged societies and micro and small enterprises. Various micro-credit programs launched within the last two decades appeared to be not optimum, as shown in the latest Indonesia`s Financial Inclusion Index, which was still at 20%, a figure considered low in Asia. Financial inclusion programs/strategy and monitoring of achievements can be conducted more comprehensively and integrated into the matters of supply, demand and infrastructures. A shift of strategy from microfinance to financial inclusion in poverty alleviation requires a change of paradigm, not only a change of terms. It is also a shift of paradigm that will open opportunities and challenges