Fact Sheet : The Potential Market for Financial Products in Indonesia’s ASGM (Artisanal Small Scale Gold Mining) Sector

Access to finance is one of the most significant and pernicious barriers of the ASGM sector. Miners’ cooperatives and organizations need investment to fund their mining operations, but do not have the requisite capacity and experience to access conventional financing options. From the lending perspective, finance entities (banks, microfinance institutions, and other lenders) do not commonly provide loans to the ASGM sector as the risks are often perceived to be too high. The risk status of the ASGM sector relates to the lack of legal status of mining operations and inconsistency in gold production. Traditional finance entities do not have the expertise and experience to review ASGM loan applications, or to develop financial products that are tailored to the ASGM sector.