Economic analysis report Essay Example | Topics and Well Written Essays - 750 words

Economic analysis report - Essay Example Also, that loan would enable citizens to access insurance services such as natural disasters and health facilities as a way of reducing their vulnerabilities towards risks. The financial system of Indonesia is dominated by banking institutions. As such, only a few people access credit services from those institutions. From this point of view, the loan from World Bank would promote non-banking financial sectors like mutual funds, pension funds and insurance services which have little or no financial barriers for the middle and poor members of the society. As such, it becomes apparent that the World Banks loan targeted the middle and poor members of the society, mainly to boost their lifestyles through empowering them financially. Achieving such a goal is possible through facilitating such less fortunate groups with easy access to cheap credit facilities and providing them with insurance services to reduce the risks and vulnerabilities faced by these young investors. The loan offered by the World Bank to the Government of Indonesia was vital to the government’s effort in maintaining its financial stability, improving financial management and preventing a financial crisis in the country. Another purpose of the loan was to promote the development of the micro-financing sector and non-banking institutions. As a fact, the micro-financing sector of Indonesia is still underdeveloped; thus with the signing of the loan from the World Bank, this sector would be among the primary targets for development as it helps a lot in protecting millions of families who live below the poverty line. Precisely, the World Bank funding would guard such families against hardships like unexpected natural disasters and deaths. Secondly, the loan would be used in addressing one of the financial goals being set by the government of Indonesia (World Bank