Microfinance for Women: Risk Mitigation and Its Impact on Household Welfare

Riduwan Riduwan; Amrullah Amrullah; Akhmad Arif Rifan

doi:10.61255/jeemba.v4i5.1572

Authors

Riduwan Universitas Ahmad Dahlan, Indonesia
Amrullah Universitas Ahmad Dahlan, Indonesia
Akhmad Arif Rifan Universitas Ahmad Dahlan, Indonesia

DOI:

https://doi.org/10.61255/jeemba.v4i5.1572

Keywords:

Household Welfare, Microfinance, Risk Mitigation, Women, Financial Inclusion

Abstract

Purpose – This study examines financing risk, risk mitigation practices, and their contribution to household welfare in the Government Investment Center (PIP) ultra-micro financing program for women entrepreneurs.

Design/methodology/approach – This study employs a qualitative approach supported by descriptive quantitative data. Secondary data consist of outstanding financing (OS), non-performing financing (NPF), and borrower composition obtained from PIP financial reports over a seven-year period. Primary data were collected through in-depth interviews with PIP management, intermediary institutions, and women borrowers, complemented by focus group discussions.

Finding/Results – The findings show that women accounted for approximately 95% of financing recipients, while the average NPF remained at only 0.13%, indicating consistently low financing risk. The study further reveals that risk mitigation extends beyond financing procedures through continuous business mentoring, entrepreneurship training, marketing assistance, and the active involvement of intermediary institutions. These complementary interventions strengthen borrowers’ business capacity and contribute to improvements in household welfare.

Originality/Value – This study demonstrates that integrating financial services with non-financial support can effectively mitigate financing risk while enhancing women’s economic empowerment and household welfare. The findings provide practical implications for policymakers and microfinance institutions by highlighting the importance of combining financing with capacity-building interventions to promote sustainable financing and strengthen women's financial inclusion.

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