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

Author

Listed:
  • Lucky Nugroho

    (Mercu Buana University Jl. Meruya No.1, Meruya Selatan, Jakarta Barat, Jakarta, Indonesia)

  • Wiwik Utami

    (Mercu Buana University Jl. Meruya No.1, Meruya Selatan, Jakarta Barat, Jakarta, Indonesia)

  • Taufik Akbar

    (Mercu Buana University Jl. Meruya No.1, Meruya Selatan, Jakarta Barat, Jakarta, Indonesia)

  • Willy Arafah

    (Trisakti University JL Kyai Tapa No.1, Jakarta, Indonesia.)

Abstract

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 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.

Suggested Citation

  • Lucky Nugroho & Wiwik Utami & Taufik Akbar & Willy Arafah, 2017. "The Challenges of Microfinance Institutions in Empowering Micro and Small Entrepreneur to Implementating Green Activity," International Journal of Energy Economics and Policy, Econjournals, vol. 7(3), pages 66-73.
  • Handle: RePEc:eco:journ2:2017-03-09
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    References listed on IDEAS

    as
    1. Marion Allet & Marek Hudon, 2015. "Green Microfinance: Characteristics of Microfinance Institutions Involved in Environmental Management," Journal of Business Ethics, Springer, vol. 126(3), pages 395-414, February.
    2. Marion Allet, 2012. "Mitigating environmental risks in small-scale activities: what role for microfinance? A case study from El Salvador," Working Papers CEB 12-021, ULB -- Universite Libre de Bruxelles.
    3. J. Copestake & P. Dawson & J.-P. Fanning & A. McKay & K. Wright-Revolledo, 2005. "Monitoring the Diversity of the Poverty Outreach and Impact of Microfinance: A Comparison of Methods Using Data from Peru," Development Policy Review, Overseas Development Institute, vol. 23(6), pages 703-723, November.
    4. Agier, Isabelle & Szafarz, Ariane, 2013. "Microfinance and Gender: Is There a Glass Ceiling on Loan Size?," World Development, Elsevier, vol. 42(C), pages 165-181.
    5. Copestake, James, 2007. "Mainstreaming Microfinance: Social Performance Management or Mission Drift?," World Development, Elsevier, vol. 35(10), pages 1721-1738, October.
    6. Marion Allet, 2012. "Why do microfinance institutions go green?," Working Papers CEB 12-015, ULB -- Universite Libre de Bruxelles.
    7. Marc Labie, 2013. "Introduction," Mondes en développement, De Boeck Université, vol. 0(3), pages 7-8.
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    Cited by:

    1. Willy Arafah & Lucky Nugroho & Rowlan Takaya & Soeharjoto Soekapdjo, 2018. "Marketing Strategy for Renewable Energy Development In Indonesia Context Today," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 181-186.
    2. Lucky Nugroho & Wiwik Utami & Citra Sukmadilaga & Tettet Fitrijanti, 2017. "The Urgency of Allignment Islamic Bank to Increasing the Outreach (Indonesia Evidence)," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 283-291.

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    More about this item

    Keywords

    Green Microfinance; Corporate Governance; Sustainability;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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