Capabilities, resilience, and inclusion of rural women in Indonesia: A case of platformised microfinance

Digital financial inclusion (DFI) offers an inclusive digital means to reach financially excluded and underserved populations, including rural women. Platformised microfinance, for instance, has been employed as a business model to create a virtual connection between resourceful urban lenders and rural women borrowers in order to fund their micro businesses. This financial access enables greater opportunities (capabilities) to support unsecured microloans for women who jointly share responsibility in a lending group. Yet the theorisation of ICT for Development (ICT4D) research has narrowly focused on the access and active use of DFI. Limited research has paid attention to the implications of such financial inclusion interventions on rural women’s livelihoods and their ability to overcome financial adversity, i.e. financial resilience. The existing research assumes that financial access interventions improve women’s wellbeing. However, this study argues that financial access does not automatically result in an expansion of capabilities for a better life, but it also deprives women of their capabilities if such schemes do not address the fundamental vulnerabilities of rural women.

This thesis thus aims to examine the implications of DFI for rural and semi-urban women borrowers in Indonesia for their well-being and agency and the effects of building women’s financial resilience. The study is an interpretive qualitative research study that seeks to understand women’s experiences with a crowdfunding microloan platform in Indonesia. The data was collected using semi-structured interviews, field observations, and focus groups involving 66 participants, including women borrowers, platform managers and field officers, lenders, and Indonesian financial and ICTD experts. The data consisted of interview transcripts, images, and field notes, which were analysed using thematic analysis.

The findings reveal that while the microloan interventions have shown some improvement in women’s well-being and agency, the incidents of debt spiral persist - exacerbating the financial vulnerabilities of rural households. Despite financial access, the findings reveal a lack of building resilience efforts. The study integrates financial resilience with Amartya Sen’s capability approach (CA), providing a critical lens to conceptualise how DFI can expand or deprive women’s capabilities to lead the lives they have reason to value.

The thesis makes important theoretical and empirical contributions to existing literature on (digital) financial inclusion, digital platform and development, and ICTD in general. Empirically, this study provides an in-depth case study on a microfinance digital platform in Indonesia, juxtaposing its business model with the situated experience and long-term implications for its intended beneficiaries. Theoretically, this thesis highlights the critical role of financial resilience in DFI. It adds a novel perspective to the literature by conceptualising financial resilience from the CA perspective, shedding light on the complexity of digital financial inclusion beyond the provision of financial access and generating recommendations for policy, service provision, and participants of DFI.