`Many used loans to buy consumers goods'

The city administration plans to increase the fund channeled through its subdistricts for empowering poor people from a previous Rp 250 million last year to Rp 500 million this year. Some city residents have welcomed the program as it will help improve the welfare of the underprivileged. However, they also lamented the fact that many residents only used the fund for buying consumer goods. The Jakarta Post discussed the issue with some of them.

Nanik, 23, is an employee at a home industry in South Jakarta. She lives in Radio Dalam, South Jakarta with her husband:

Actually I know of such a program. I support the idea as it will help improve the lives of people in the lower-income bracket or housewives who want to run their own businesses.

Unfortunately, I reckon that there are many people in my neighborhood who applied for the loans and then spent them just to buy consumer goods. They bought televisions or refrigerators or other luxury goods.

They made use of the opportunity, I guess. I don't agree with that practice, as it does not fulfill the objectives of the program.

Worse still, they would make an excuse so as not to pay their monthly installments. It means that they abused the loan.

But in a way, many Indonesians, ranging from the poor through to those in the upper-income brackets, are notorious for their ploys to avoid paying their dues. The country is full of liars.

Well, we can see that even small-scale vendors in the traditional markets usually make an excuse to avoid paying even just Rp 1,000 a day to the loan shark. It's hard to find reliable people nowadays.

Popi, 29, is a housewife with one son. She resides in Pluit, North Jakarta with her family.

I am aware of the program but I don't know precisely how to avail of it. If possible I would like to apply for a soft loan to run a garment business. Maybe Rp 2 million would be enough for me. Formerly, I sold clothes and I was able to make a lot of money. Unfortunately, I went bankrupt as I had to pay off a loan I had taken with a loan shark.

At that time I borrowed Rp 1 million and I had to pay 20 percent interest per month. It caused me to suffer a huge loss in my business.

I welcome the opportunity as it will really help empower the poor. However, I regret that many have mismanaged the soft loans, for things that are not advantageous. Generally speaking, housewives have such tendencies.

I wish that the subdistrict officials responsible for the money disbursement were honest and accountable. Perhaps, it would be better to pay the installments into a bank account belonging to the subdistrict in order to minimize irregularities.

I realize that such a program with a relatively large amount of funds will be prone to fraudulent practices. But on the other hand, I believe that those from the lower income bracket who apply for the loans will have the goodwill to repay the loan in installments regularly.

Utin, 32, is a housewife who resides in Gandul, South Jakarta with her husband and two children:

I didn't know that there would be a fund disbursed to every subdistrict here. But I welcome an empowerment program like that.

I think that soft loans are very useful for the poor people to set up their own business. My neighbor even applied for the loan to buy a motorcycle. He paid the monthly installment by working as an ojek (motorcycle taxi) driver.

However, I don't have any intention of applying for the soft loan. I have been traumatized by taking out loans. Up to this moment I have almost given up paying the monthly installment on my small house in Tangerang.

I want to quit the deal by selling the house but I have been unsuccessful as nobody wants to buy the house. I am really fed up with the installments as it burdens me a lot.

I used to run a garment business and I prefer to rely on my own financial and personal connections rather than soft loans.

Basically, I will make money from my business if I have the capital to run it. Otherwise, I prefer to be a housewife.

-- Leo Wahyudi S