Unlocking Financial Inclusion: Bridging Web3 and Real-World Impact in Indonesia

Why Small Businesses in Indonesia Struggle to Get Loans

Indonesia is home to over 65 million Micro, Small, and Medium Enterprises (MSMEs), yet only around 20% currently have access to formal bank loans. This enormous financing gap leaves millions of entrepreneurs relying on informal, costly, and unreliable sources of credit. Traditional banks, with their stringent requirements, high collateral demands, and inflexible loan structures, have consistently struggled to serve these businesses effectively, leaving MSMEs constrained in their ability to grow and contribute more robustly to the economy.

How Forest Jalan and Kaia are Helping Small Businesses

Recognizing this critical gap, Forest Jalan has partnered with Kaia, a high-performance public Layer 1 blockchain that brings Web3 to the fingertips of hundreds of millions across Asia, to pioneer an innovative collaboration that leverages blockchain and Web3 technologies to bring tangible liquidity solutions to Indonesian MSMEs. Kaia has provided a strategic grant that enables Forest Jalan to disburse targeted loans directly to MSME merchants, specifically those identified through JOOB — an innovative talent-matching service operated in a partnership with Grab. JOOB actively connects local merchants and job seekers, creating rich, reliable data sets that allow Forest Jalan to utilize alternative credit scoring methods to accurately assess creditworthiness and minimize the risk of non-performing loans (NPL).

Using Blockchain to Bring More Money to Local Businesses

The collaboration between Forest Jalan and Kaia represents a powerful real-world application of blockchain-enabled Real World Assets (RWAs) — real-world financial assets like loans and receivables tokenized on blockchain. With an aim to channel Web3 liquidity directly into MSME loans, we create an essential link between innovative digital finance solutions and tangible economic activity. This demonstrates clearly how blockchain can serve as a practical, impactful tool far beyond speculative investments.

Giving Small Businesses Easier and Fairer Access to Money

Financial inclusion is at the core of this collaboration’s mission. In a country where over 51% of adults remain unbanked or underbanked, the introduction of a trustworthy, blockchain-supported transparent financial framework has profound implications. By providing MSMEs with easier access to affordable and transparent financing, this partnership helps business owners break away from costly informal lending sources, enabling sustainable growth and financial empowerment. It also allows entrepreneurs to build transaction histories and credibility, further integrating them into the formal financial ecosystem.

How Investors Can Earn Money While Helping Local Businesses

As an investor, the opportunities to support MSMEs in Indonesia, as one of the fast-growing economies in the world, are immense, demonstrating merchants’ willingness and ability to borrow responsibly at interest rates ranging typically from 10% to 30% per annum. These loans, with sizes varying from just a few thousand dollars to upwards of a million USD, cater to diverse business needs and growth stages, reflecting the vast potential and flexibility inherent within the Indonesian market.

New Ways to Help Workers Get Their Salaries Early

Moreover, the scale of opportunity in Indonesian micro-lending is immense, with innovative concepts such as Earned Wage Access (EWA) gaining traction. EWA enables employees to access their earned but unpaid wages ahead of payday, offering a practical financial tool to meet immediate cash flow needs. Given Indonesia’s monthly salary cycles and widespread financial stress among workers, there’s a clear demand for wage advancement practices like EWA, though current offerings still have significant room for improvement. In this market, even charging a modest administrative fee of one dollar on a $50 EWA transaction is widely accepted. Impressively, this small fee translates into an effective annual interest rate ranging between 24% and 48% (rarely beyond 100%), depending on the duration of the advance — highlighting the substantial yield potential and attractiveness of such micro-finance solutions for investors.

Forest Jalan: Making It Easy and Safe for Investors

Forest Jalan serves as the trusted facilitator, bringing attractive, yield-generating Indonesian RWAs into the global digital investment landscape. This provides Web3 investors unique opportunities: meaningful returns, transparent risk management, and positive societal impact. We serve as the trusted gatekeeper and facilitator, bringing Indonesian RWAs into the global digital investment arena with the promise of attractive yields coupled with manageable risk.

The collaboration strategically leverages JOOB’s platform to ensure high-quality loan origination. By focusing a significant portion of lending activities on merchants and job seekers vetted through JOOB, Forest Jalan maintains a strong pipeline of creditworthy borrowers. This targeted approach reduces risks substantially, ensuring sustainable returns for Web3 investors while simultaneously fostering financial inclusion among underbanked communities.

Why This Matters to Kaia and Blockchain

Kaia views this collaboration as more than a financial venture — it is a powerful validation of the Kaia blockchain ecosystem’s real-world value proposition. This initiative clearly showcases how blockchain resources, when aligned thoughtfully with on-the-ground realities, can produce measurable economic impacts. For Kaia, it’s about demonstrating blockchain’s practicality and scalability in delivering solutions that meaningfully improve people’s lives, particularly those traditionally underserved by financial institutions.

What’s Coming Next

This first step marks the start of an ongoing narrative. In future articles, we’ll explore deeper into the technologies behind our innovative lending solutions, share insights and lessons learned from initial implementations, and highlight powerful stories of transformation among MSMEs benefiting directly from these loans. Together, Forest Jalan and Kaia are charting a new pathway where Web3 innovation meets real-world finance, empowering Indonesia’s entrepreneurial backbone and creating sustainable economic growth that benefits investors, MSMEs, and communities alike.