EMPOWERMENT PROGRAM FOR THE HAVES NOT
March 26, 2008
The aroma of bread and fermented cassava freshly fried unfolds from the house of baker Mimin in a densely-populated settlement in Duri Utara, West Jakarta. Within his three by eight-square meter home a number of people were busy mixing and frying dough, and packaging bread with plastic bags.
Starting out with a Rp 3 million (US$326) loan from the administration's Subdistrict Residents Empowerment Program (PPMK), Mimin has been making fried bread for sale at nearby kiosks and markets around Tambora, since 2002. As a disciplined debtor with a growing business, she has received a Rp 20 million loan, some of which was used to buy a large-scale dough mixer worth Rp 6.9 million. "We have received PPMK soft-loans four times now," she told The Jakarta Post.
Ibu Mimin previously worked as a tailor in a ready-made clothing factory while her husband, Sadirin, was formerly employed at a bakery. The couple decided to start their own bakery business because they preferred not to work for other people. They received the first loan six months after they started the business. Their flourishing micro business currently employs seven staff.
They have been allowed to borrow increasing amounts over the years because they have shown good performance and have repaid their debts on time. "The family is currently the best model of how PPMK can help improve home industry. Their business has been able to recruit workers for employment," Duri Utara subdistrict council (Dekel) head Cecep Yusuf Wahyudi said Monday.
Dekel organizations were devised to manage the PPMK program at a subdistrict level. Cecep, who has been in charge of the PPMK program since it began in 2002, said he was proud some Duri Utara residents (who are mostly poor) could improve their low income and eat more than one decent meal a day.
Since 2002, the subdistrict has distributed a total of Rp 2.1 billion in cash loans to more than 2,000 residents with micro businesses ranging from bakeries to tailors, kiosk owners and food stalls. Duri Utara subdistrict was chosen for having the best PPMK management, among some 267 subdistricts around Jakarta, last year. The subdistrict's non-performing loans make up only 11 percent of its total disbursed funds. "From the beginning, with banners and regular meetings, we made sure residents really understood the fund was not grants but soft loans," Cecep said.
Cecep said he had experienced only a few problems with repayments, because he always involved other residents. He instated a sanksi renteng policy whereby cash aid to certain community units (that had the most residents not repaying loans) was temporarily stopped. "With this policy, the good debtors in the area are motivated to remind their poorly-performing fellows to pay back their loans on time."
Unlike Duri Utara subdistrict, Petojo Selatan subdistrict in Central Jakarta saw a much higher number of non-performing loans. Subdistrict council head Megawati acknowledged up to 30 percent of the total Rp 2.4 billion in funds disbursed since 2002 were non-performing. "These debtors usually believed the funds they received were grants for the poor which they didn't need to pay back."
People Empowerment Board (BPM) head Budi Harjo said around 16 of the 267 subdistricts in Jakarta had encountered problems in managing PPMK funds, including loans outstanding due to deaths of debtors and bankruptcy, as well as abused authority. The previous head of the Petojo Selatan Dekel ran away with some Rp 160 million of PPMK funds in 2006. Until now he is still listed as a fugitive.
Megawati said there have yet to be any performing micro businesses in her subdistrict. "It is already good if they are simply able to continue running their business (with the loan)," she said.
While the PPMK soft-loans are designated for assisting micro businesses, both subdistricts acknowledged they still disbursed funds to poor families that use the money to pay for daily and education expenses.
Mimin, however, said she disagreed with the use of PPMK loans to cover daily expenses. "That would just be a waste. They will never improve their lives because the money will only get spent," she said. BPM is planning to increase the accountability of PPMK by setting up cooperatives to replace Dekel. Ibu Mimin warmly welcomed the plan, saying a cooperative allows members to borrow and save. "Saving is a must, not an option," said the mother of two girls who has started paying education insurance for her youngest daughter.
posted by mcDamas @ 2:26 PM,
