Alfi Syahrin talks to Co-op News about his work with Microfinance Innovation Center for Resources and Alternatives (Micra), a foundation focused on the development of the microfinance sector in Indonesia, which works extensively to support the development of co-ops and other small and medium enterprises (SMEs).
How did you become involved in SME banking and microfinance institutions?
When I was young I always had a strong interest in economics. I aspired to build a career in the banking sector and this led me to pursue a bachelor’s degree in economics. Early in my career, I joined a national private bank and later advanced to the position of vice-president at Bank Negara Indonesia, where I was deeply involved in SME banking.
In 2007, I was offered an opportunity by Mercy Corps to manage the Financial Access Program, which marked the beginning of my journey in microfinance. I worked with seven microfinance institutions (MFIs) to facilitate agricultural lending for more than 150 farmers. Additionally, I helped MFIs expand their services to underserved rural areas, identified new sustainable financing sources, and offered training on loan and repayment monitoring.
As my involvement deepened, I increasingly handled capacity building for MFIs across various projects, taking on roles as a trainer, module developer, mentor and monitoring lead. During this period, I became familiar with Micra, which was playing a significant role in strengthening MFIs across Indonesia.
In 2014, my supervisor at Mercy challenged me to take a leadership role in reviving Micra, which at the time was facing major operational difficulties and at risk of closing. I agreed to split my time – working two days a week for Micra and three days for Mercy. After one year, my supervisor asked me to choose between the two. I chose to fully commit to Micra because of its mission, values, and the impact it was delivering to the financial inclusion landscape in Indonesia.
Today, I serve as executive director of Micra Indonesia, where I lead initiatives that strengthen microfinance institutions, co-ops, and MSMEs through innovative capacity building, strategic partnerships, and inclusive financial development.
When did you learn about co-ops and how is Micra Indonesia working with them?
I’ve been familiar with co-ops since my childhood, but my professional involvement began in 2007 through the Financial Access Program in Aceh. At that time, Mercy, together with IFC and GTZ (now GIZ), established an institution that would focus on strengthening microfinance institutions – particularly co-ops. This emerged from their recognition of the vast potential of microfinance in Indonesia, especially in reaching communities across the archipelago, where co-ops play a crucial role in enabling access to finance.
Following its establishment, Micra Indonesia was positioned as a dedicated institution for microfinance development. Our first engagements with co-ops began in post-tsunami Aceh, where the need for economic recovery and institutional rebuilding was urgent. Micra delivered a range of services including capacity building, loan guarantee schemes, institutional ratings, and financial appraisals.
Some of the key projects I’ve led include the Loan Guarantee Scheme, which successfully supported 25 co-ops in expanding access to finance for underserved communities. Another was Peka (Strengthening the Cocoa Economy in Aceh), where we conducted intensive capacity building for co-ops across five districts. With the Indonesia Liquidity Facility After Disaster project, Micra secured US$1.8m to strengthen the resilience of co-ops in disaster-affected areas by improving liquidity and institutional performance.
These projects highlight Micra’s long-standing commitment to empowering co-ops, especially in vulnerable and remote regions, to become effective engines of inclusive economic development.
How was Micra Indonesia founded?
Micra Indonesia was established in 2006 as a strategic initiative by Mercy, in collaboration with the International Finance Corporation (IFC) and GTZ (now GIZ). The founders recognised the urgent need for a dedicated institution that could support and strengthen microfinance institutions— – particularly co-ops – as a means of accelerating post-crisis recovery and economic development. At that time, Indonesia was still recovering from the 1998 financial crisis and the 2004 tsunami. These events highlighted significant gaps in financial access, especially across Indonesia’s remote and underserved islands.
In response, Micra was created to be a centre of excellence in microfinance, giving institutions the tools, knowledge, and support needed to serve their communities effectively and sustainably.
Our programmes are funded through donor grants, service-based revenues, and client partnerships. Over the years, Micra has built strong collaborations with international donors, government agencies, private sector actors and local institutions, enabling us to implement scalable, sustainable development initiatives.
What role do co-operatives play in the microfinance and insurance sectors?
In Indonesia, co-ops are legally recognised institutions, and are authorised to conduct savings, lending and insurance activities. This reinforces the role co-ops play in delivering financial services to communities that are beyond the reach of formal banking institutions.
Indonesia, with over 17,000 islands, faces significant infrastructure and logistical challenges in ensuring equitable access to finance. Many citizens, especially in remote and rural areas, still lack access to formal financial services. In addition, limited financial literacy further widens the inclusion gap. In this context, co-ops provide a viable and community-rooted solution to bridge these disparities. Their localised and member-driven approach makes them powerful vehicles for promoting financial inclusion and protection.
Co-ops in Indonesia play a crucial role in creating financial stability and promoting equality by offering savings products, credit and microinsurance tailored to the needs of their members. They are particularly effective because of their ability to understand and respond to local socio-economic conditions.
However, despite their strategic importance, co-ops face several persistent challenges. These include weak internal governance, limited access to capital, inadequate digital infrastructure, and difficulties in reaching members located in geographically isolated areas. Moreover, many
co-ops struggle with leadership renewal, lack of innovation, and insufficient knowledge transfer between generations. Without targeted technical assistance and institutional strengthening, these issues can significantly hinder their long-term sustainability and effectiveness.
At Micra, we see these challenges as opportunities to support co-ops through capacity building, technical support and strategic partnerships.
What lies ahead for microfinance and insurance co-ops in Indonesia?
I am highly optimistic about the future of co-ops in Indonesia. As we look ahead, co-ops are well-positioned to play a central role in building a more inclusive, stable, and resilient economy.
This aligns closely with the vision of Indonesia’s founding father, Mohammad Hatta, who saw co-ops as the backbone of national economic empowerment.
What strengthens this outlook even further is the alignment with the incoming administration. President-elect Prabowo Subianto has expressed a commitment to making co-ops a key pillar of economic development. Through initiatives like Koperasi Merah Putih, the government aims to leverage co-ops to foster economic equality and drive growth and national resilience.
In addition, the rise of public awareness — particularly among younger generations – about the importance of insurance and financial protection is opening new opportunities. Many Gen Z voices are now advocating on social media for the need for health and life insurance. As concerns grow over the long-term sustainability of government programmes like the BPJS national health insurance programe, private insurance – delivered through trusted local channels like co-ops – will become even more vital. BPJS itself has started working with co-ops to strengthen its liquidity and ensure protection for members.
