Empowering Women Through Income Generating Projects: Evidence From Indonesia

Transcription

1 Empowering Women Through Income Generating Projects: Evidence From Indonesia Tri Lisiani Prihatinah, Dora Marinova and Laura Stocker Introduction Most feminists believe that income generating projects are a practical solution to empowering women and one of the strategies to strengthen women s positions (Overholt et al., 1991). Involving women in a project, therefore, should be an important policy for government and development organisations because women as actors, rather than victims, can drastically change their own lives. According to Gionetten et al. (1994), women not only manage economic activities better than men, but also use the economic resources more wisely and to the benefit of the entire household. Nevertheless, they have a bleak economic presence in the developing world. This paper examines the Indonesian government s efforts to empower women by establishing and running economic schemes aimed at alleviating poverty. The first section describes the schemes objectives and management. The part to follow analyses the ways women have used the financial support received from the government, the difficulties they have experienced in using the schemes and the hopes they have for their improvement. The last section presents recommendations, which will help make the schemes more successful and consequently will lead to positive changes in poor women s economic situation. Objectives of the schemes Prosperous Family Saving (TAKESRA/ Tabungan Kesejahteraan Rakyat ) and Prosperous Family Business Credit (KUKESRA/ Kredit Keluarga Sejahtera ) which have been running since 1995 in Indonesia, are two government schemes aiming at promoting better family economic status and alleviating poverty. Both schemes give priority to poor women in rural areas. TAKESRA is a scheme from the central government which objective is to initiate saving awareness through providing basic saving amongst poor families (TAKESRA s Guidelines, 1997, 2). After being registered at a bank with a savings account and becoming a member of a family income generating project (or UPPKS group/ usaha peningkatan pendapatan keluarga sejahtera ), families are allowed to join KUKESRA. This scheme provides a loan to the value of ten times the family s savings. The loan can be obtained at five stages (please, refer to Table 1) from 4 months up to a year. A prerequisite for moving onto the next stage is that at least 75% (preferably, 100%) of the existing loan are repaid. There is a month tolerance after the expiry date of the loan within which installments are also accepted. The main objective of KUKESRA is to encourage families to develop their own businesses, which in the long run will make them prosperous (the way the latter is used in the government s jargon is to mean taking families above the poverty line).

2 Empowering Women Through Income Generating Projects 2 Table 1: LOAN DESCRIPTION stage period of maximum installment interest total time amount (month) (rupiah/ US$) per month (%/y) amount/mth. installment Rupiah I 4 20, / 2 5, , II 6 40, / 4 6, , III 8 80, / 8 10, , IV , / 16 16, , V , / 12 26, , Source: KUKESRA s Guidelines (1999) Management of a KUKESRA loan The family savings scheme (TAKESRA) is a straightforward program where the government provides a limited amount of savings which families are encouraged to keep in order to use at a later stage. Ideally, the main purpose of these savings is to act as a basis for obtaining the KUKESRA loan. However, there is a major additional requirement which families need to satisfy before they consider applying for a loan, namely they need to become a member of a KUKESRA group and work on a particular income-generating project. This involves several steps (KUKESRA s Guidelines, 1999,pp.2-5), i.e.: 1. A member of the family who wants to apply for credit needs to fill in a form and liaise with a KUKESRA group leader; 2. Group leaders compile a list of seven to ten members and ask approval of the planned economic activities from the local government ( aparat desa ), as well as from the local supervisor (who works under the Indonesian Family Planning Program s National Board); 3. If and when approved, the application is taken to the nearest post office. There the loan contract will be signed by the group leader on behalf of all the members, and the post official on behalf of a public bank (namely PT. Bank National Indonesia /Indonesian National Bank). This marks the beginning of the new KUKESRA loan. 4. After the loan has been established, the local supervisor together with the group leader meets with all the members to announce that the loan has been taken out, explain the amount of interest due over it, the amounts and the process of installment payments and other administrative matters. Usually a village meeting is used to explain the details of the scheme which is attended by around ten families. Such meetings soon become monthly gatherings (called dasawisma /ten houses) which have a regular agenda, including items such as

3 Empowering Women Through Income Generating Projects 3 participation in a revolving fund ( arisan ), cooking exhibitions, handcraft exhibitions, and religious speeches. The intention of the scheme is to encourage women (as family representatives) to take the loans and this has been the predominant majority of the cases so far. Consequently, the group leaders are also women. Their main obligations include (KUKESRA s Guidelines, 1999, p. 2): 1. selection and coordination of people who are eligible to obtain a loan; 2. together with the local supervisor ( petugas lapangan ) and local investigators ( pemeriksa ) to check and fill in the application form for the loan; 3. management and administration of all members within the group; 4. personal responsibility for every installment payment within her group, including depositing the money in the post office (where the loan contract was signed). It is interesting to note that the group leaders often have a very limited understanding of the administrative procedures surrounding the loan. Nevertheless, the scheme has been running successfully, i.e. more and more loans are being requested and repaid on time. One explanation is that when the group leader proves to be incompetent or unable to fulfil her obligations, the local supervisor instead takes over the handling of the affairs. This failure to fulfil obligations can occur due to the lack of management s understanding. The relatively low degree of education is one of the reasons preventing women to perform well. Most women in rural areas have very limited schooling; for example in 1998, only 46% of them had graduated from primary school (Suharto, 1999, p.17). Besides, most group leaders do not volunteer to become group leaders and they are appointed to this position. Therefore, they are less keen to perform well and spend their personal time and money on the income-generating project. On the other hand, local supervisors perceive that their performance evaluation will be affected by the way the KUKESRA loans are handled. The more failures (i.e. the loans not being repaid) occur, the worse their official reputation will be. To avoid this happening, they prefer to take over the group leadership. This solves the problem in the short term, but in the long run it is a missed opportunity to educate and train the women from the poor areas how to handle the management duties in relation to the loan and the project itself. Indicators for success There are a number of indicators which can be used to evaluate whether the schemes have been successful (or not) in their implementation. The evaluation of their results significantly depends on the point of view of the different institutions involved in operating the schemes. For example, for the bank the scheme is successful if the loan

4 Empowering Women Through Income Generating Projects 4 is repaid on time. It also means that the more women pay their loans on time, the more successfully the bank performs. Meanwhile for BKKBN (The National Board of the Family Planning Program), the notion of success is linked to the number of women who have been attracted into the schemes. The more women are covered into the schemes, the more successful the government s initiative is. For the poor women and their families, the success is measured along the lines of improved economic welfare. The more income they are able to generate, the easier their lives will be and the more resources they will have in their disposition. Success in one aspect does not necessarily translate into success in the others. A 2000 report by BKKBN depicts Cilacap as the area with the highest number of delinquent loans, while the lowest number was in Tegal. (BKKBN, 2000). According to the number of women involved in the schemes, the report points out Brebes as the highest achiever and Magelang as the lowest. There is no mentioning, however, of the difference these schemes have made in women s lives. Is the on-time repayment of a loan an indicator of improved financial status of a family or has the loan put even more burden in the poor women s family duties? Are the schemes contributing to building family prosperity or are they bringing more hardship to women? In order to shed some light onto these issues, we undertook in the second half of 2000 an interview-based survey of Indonesian women who have joined the schemes. We conducted 93 interviews in three following districts at Central Java ie. Brebes, Purbalingga and Cilacap. They are representing the most successful, the average and the worse district in implementing two schemes. The section to follow presents some of the findings from this research. Usage of the loan Basically, the loan should be used for economic production purposes, such as the purchase of raw material for a small-scale industry, to establish and run a small businesses or trade, for service development or buying productive tools (KUKESRA s Guidelines, 1999, p.5). What we found out from the interviews, however, is that women use their loans for a much wider variety of purposes (see Table 2). Table 2: TYPE OF EXPENDITURES Expenditure (s) No % 1. Economic production Consumptive expenditure (meal, cloth) others (don t know) Total The first most striking finding is that 70% of the loans were used for consumption, including the satisfaction of everyday needs, such as daily meals and clothing. In terms of economic production, the majority of women used the loan for additional capital rather than for starting up a new business of their own. One reason was the small size of loan accessible to them at all stages, but especially at the first stage, ie.2, Rupiahs or US$2, or the equivalent to 1.5 kilograms of rice. This amount of loan is not enough to set up a new small business or to support growth. Most women said clearly that such loan is too small to run a business; other said that the loan is enough or not enough, but OK. Their negative comments reflect the need for getting cash into their pockets to provide basic needs, such as food and cloth.

5 Empowering Women Through Income Generating Projects 5 The women s situation has been getting worse since the economic crisis in 1998 which has hit Indonesia and rural women appear to be particularly affected (FAO, 1999). Therefore women in rural areas need now even more money to survive and cater for the basic needs. In other words, the financial support provided by KUKESRA is not contributing significantly to their wellbeing and is far from being a successful tool in alleviating poverty. At the same time, government officials who are involved in operating income generation schemes, are not convinced that the women (who are the primary beneficiaries) have the knowledge, skills and commitment to break out of poverty. The following case in Brebes - the best district to run the schemes, based on the BKKBN s evaluation is indicative of such prejudice. The local supervisor there did not want to approve an advanced loan, even though the women had a good financial record for repaying their loan(s) on time. The supervisor had a financial reserve from the Indonesian Central Government for an advanced scheme called KPKU for the maximum sum of 2,000, Rupiahs per person (or more than six times the maximum amount of KUKESRA.). KPKU (Implementation Guide for Advanced Loan Throughout Initiative Relationship/ Petunjuk Pelaksanaan Kredit Pengembangan Kemitraan Usaha ) is a relatively new advanced scheme which is available to women if they have been successful with TAKESRA/KUKESRA. The local supervisor was worried that when the bigger loan is approved, the women would not repay it, therefore her reputation would be challenged and she will be pressured financially from her senior(s). She said I could approve the loan for a small amount of money for them (women), but for a bigger one o,o, no!. This situation clearly reflects the fact that a local supervisor undervalues women s performance, even though they have already fulfilled all the schemes obligations. Another significant issue raised by the interviewed women was the notion of timing for the loans. They need a shorter time for each stage to be finalised. They hope to rotate the money more quickly, and get more benefits into their pockets. Most of them said that, (i)t was difficult to achieve the benefit from an amount of $2 over 4 months. This difficulty stimulates them to spend their loan for an easier expenditure, such as a consumptive one. In conclusions, the gathered evidence does not support a positive evaluation of the KUKESRA scheme as far as the difference it makes into women s individual lives. It is not surprising then that women are not over-enthusiastic in taking out loans or becoming group leaders. There is an urgent need for changes to be made in order to avoid misguiding statistics and achieve real meaningful results. Recommendations Based on the discussion above, there are several immediate changes, which need to be considered. They are as follows: 1. In a community group, a hierarchical management system is not appropriate. It should be changed to an inter-responsible system, where all members within the

6 Empowering Women Through Income Generating Projects 6 group are responsible for any failure or success by the members. In the existing schemes, the leaders are the only people who have the opportunity to contact other institutions, such as the bank and post office. This means that the remaining members have no chance to get accustomed to deal with more modern social and financial institutions. Consequently, they do not develop a responsible or businesslike behaviour and they lack basic entrepreneurial skills. 2. The paradigm of indicators for success should be shifted from institutions interests (i.e. the number of women covered or the number of delinquent loans) to women s interests. It means that in implementing these schemes, the degree of success should depend on their positive impact on women s lives. Moreover, the evaluation should be made mainly on the basis of women s interests. 3. In terms of social structure, the existence of such meetings as religious ( pengajian ) and/or the participation in a revolving fund ( arisan ), allows women to continue with these activities. However, the agendas at the monthly gatherings should be made more versatile to include other important aspects of running income-generating projects. For example, inviting a guest speaker (a successful small-business woman) from outside the village is one way to stimulate business thinking and ability. These changes could contribute not only to enriching women s social life, but also to their education and for their economic progress as poverty is the main problem in most of the rural areas. 4. This evidence for the schemes being unsuccessful together with the recommendations should be reported to all institutions involved in the schemes operation, such as the Indonesian National Bank, Post Office, and especially BKKBN at the central level. It is hoped that this could contribute to improve the management and running of the schemes in order to achieve their objectives and make a real difference in women s lives. Conclusion The focus of this paper was on presenting the inconsistency between the Indonesian government s effort to empower women through income-generating projects (by the operation of the TAKESRA and KUKESRA schemes) and the content of the schemes themselves, and particularly their management and evaluation. The small size of the loans combined with economic hardship, lack of education and underestimation of women s abilities encourage non-productive use of the money which challenges the long-term goal of poverty alleviation. Women deserve better care and real chance and the presented recommendations for the improvement of the schemes are a step in that direction.

7 Empowering Women Through Income Generating Projects 7 References BKKBN s Cooperation with Department of Cooperation, Small and Middle Business, BNI(The Indonesian National Bank), and BRI (The Indonesian Community Bank) (1999) Implementation Guide for Advanced Loan Throughout Initiative Relationship ( Petunjuk Pelaksanaan Kredit Pengembangan Kemitraan Usaha / KPKU ), Indonesian Government, Jakarta. BKKBN s report on Central Java (2000). Realization of TAKESRA and KUKESRA, unpublished. FAO s report (1999) Urban and Rural Poor in Indonesia suffer food insecurity, available on the net at url accessed March 2001 Gionetten V., Groverman V., Walsum E.V., and Zuidberg L. (1994). Assessing the Gender Impact of Development Projects: Case Studies from Bolivia, Burkina Faso and India. Intermediate Technology Publications, United Kingdom, pp KUKESRA s Guidelines (1999) Guidance for Cadre to Implement KUKESRA in Remote Areas ( Petunjuk Pelaksanaan Kredit Usaha Keluarga Sejahtera/KUKESRA Bagi Kader Di Desa Tertinggal ), Indonesian Government, Jakarta. Overholt C.A., Cloud K., Anderson M.B., and Austin J.E. (1991). Gender Analysis Framework. In Rao A., Anderson M.B., and Overholt C.A. Gender Analysis in Development Planning. Kumarian Press.Inc., USA,pp Suharto (1999) Laporan Pelaksanaan Takesra dan Kukesra di Kecamatan Pengadegan, Kabupaten Purbalingga, Jawa Tengah (The Report of Prosperous Family Saving and Prosperous Family Business Credit Implementation at Pengadegan, Purbalingga, Central Java), unpublished. TAKESRA s Guidelines (1997) Guidance for Cadre to Implement TAKESRA ( Petunjuk Pelaksanaan Tabungan Keluarga Sejahtera / TAKESRA Bagi Kader), Indonesian Government publication, Jakarta. The Authors Tri Lisiani Prihatinah is a lecturer in the Faculty of Law, Jenderal Soedirman University, Indonesia, Ph ext. 151, and Ph.D Candidate and Researcher, Institute for Sustainability and Technology Policy ( ISTP), Murdoch University, Australia, Ph , Fax Dora Marinova is a Senior Lecturer, ISTP, Murdoch University, Australia. Laura Stocker is Programme Chair, Sustainable Development, ISTP, Murdoch University.