The Challenges of Microfinance Institutions in Empowering Micro and Small Entrepreneur to Implementating Green Activity

Lucky Nugroho, Wiwik Utami, Taufik Akbar, Willy Arafah


This study aims to examine the challenges of Microfinance Institutions (MFIs) in empowering micro and small entrepreneur to concern and care not only for the business growth but also the environmental sustainability in their surroundings. Indonesia as developing countries also faces the environmental degradation that contributes by micro and small entrepreneurs. Moreover microfinance institutions (MFIs) have substantial relationships in term to preserve the environment because of the objectives are not only achieve the profit but also balancing with the social (people) and environment (planet) achievement and MFIs clients also micro and small entrepreneur who as the majority contributor of environment degradation in developing countries. The discussion of the paper is determined by three research questions (i) What's the role of MFIs in preserving the environment? (ii) How the role of corporate governance in MFIs? (iii) How the implementation of corporate governance in MFIs in empowering micro to implementing green activity (Indonesia Evidence)?. In addition, to ensure the commitment of MFIs should exist corporate governance, which supervise the compliance with Act No.1 2013 related to the sustainability concern from MFIs because until now the impact of the act has not given the significant impact yet because of the importance is not only the existence of regulation but also the consciousness all stakeholders related to comply and implementing of green activity.

Keywords: Green Microfinance, Corporate Governance, Sustainability

JEL Classifications: G2, G34, Q56

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