1. Efforts by the Government of Indonesia (GoI) to reduce poverty, including have brought progress. In 10 years, extreme poverty went down from 9.3% in 2014 to just 1.12% nationally in 2023. 2. However, there was only a two percent drop for national poverty rate in this same period: from 11.25% to 9.36%. This also falls short of the national government’s ambitious target of 6.5-7.5% 2024. While ongoing efforts by the government are commendable, there is more that can be done. 3. In late 2023, the UNDP Indonesia Accelerator Lab conducted a study to explore the needs and aspirations of people who lived below the poverty line. These people are often categorized by the Government of Indonesia (GoI) as People in Need of Social Welfare Services (PPKS). The study reveals several factors influencing urban poor communities’ decisions and behaviours, such as the need for cash on a daily basis, difficulties to form meaningful ties with communities, complex motivation to change, and lack of vital documents to enroll in social assistance programs. 4. In collaboration with the Ministry of Social Affairs, the National Planning and Development Agency, the Regional Planning and Development Agency of DKI Jakarta, and the DKI Jakarta Office of Social Affairs, the UNDP Indonesia Accelerator Lab is launching a series of activities called the “SEDAYA Community Empowerment Hub”, which include: a.  Training on entrepreneurship skills to equip microenterprises with additional skills to maintain business sustainability. Three training modules and sessions around business sustainability are provided to 100 micro enterprises, as recommended by the Ministry of Social Affairs and Dinsos DKI Jakarta. b. In addition, these micro enterprises receive a business risk profiling/alternative credit scoring as a way to assess their readiness and viability to receive additional funding support – micro equity financing – from social investors.  5. Existing evidence indicates that with hands-on supervision by field mentors, about 10% of micro enterprises under government programs secured access to additional  sources of funding through improving their products and business profiles, indicating a possibility for improvement and scaling up of best practices.

This work has been co-designed with the Ministry of Social Affairs, the National Planning and Development Agency, the Regional Planning and Development Agency of DKI Jakarta, and the DKI Jakarta Office of Social Affairs. The work has led to the government's buy-in in exploring the potential of integrating micro equity financing to support enterprises under their entrepreneurship programs, both at the national and sub-national levels. Within the UN system, this activity will be integrated into the implementation of the Global Accelerator on Jobs and Social Protection for Just Transitions in Indonesia (starting in 2025).

Qualitative (ethnographic, collective intelligence) data is beneficial in capturing the story of vulnerable micro enterprises, including the barriers they face in developing and sustaining their businesses. Meanwhile, alternative credit assessment / business risk profiles is useful to gauge their potential in securing additional micro equity funding from social investors. 

Alternative credit scoring will help to gauge the maturity, readiness, and behavior of micro enterprises to receive micro equity funding. This will of course be complemented by qualitative evidence gathered during FGDs, trainings, consultative workshops, and field research.