Village bank 'Usaha Bersama' a great help to women

Village bank 'Usaha Bersama' a great help to women

By Sarah Crass

CILACAP, Central Java (JP): Every morning in this Central
Javanese village of Sidakaya, Pariman arranges the cellophane
packages of dried fish on the wooden shelves lining the walls of
the small shop she has owned and operated since 1988. Outside the
shop's front door, hundreds of bandeng and kakap fish are spread
out on a sun-drenched wooden platform. Bought from a fisherman
just in from the morning's trip on the Indonesian waters, these
fish have enabled Pariman to bring about remarkable changes in
her life.

Pariman is a 35-year-old married mother of four. For years she
dreamed about opening a fish shop, but such a business is only
profitable if one deals in large quantities. To get started,
Pariman estimated she needed about Rp 500,000, a sum well beyond
her family's meager savings. Borrowing the money was out of the
question as local lenders require up to 200 percent collateral,
and she simply did not have it.

Fortunately for Pariman and thousands of women in similar
situations, Yayasan Sosial Bina Sejahtera (YSBS) made a loan
available to her through an Usaha Bersama (UB), a village bank.
The goal of UBs is to assist people who have the skills and
desire to start a business but lack the funds to do so.

The specific organization and rules of UBs throughout
Indonesia differ, but participants usually form groups numbering
up to 40. Each person determines how much she needs for her
individual business and then as a group they borrow a lump sum
from the UB. Every month, individual borrowers pay a three
percent service charge to their group's treasury, and each group
pays two percent interest to YSBS or the agency with which they
are working. The remaining one percent is kept in the group's
savings and is intended to eventually serve as operating funds.
One important component of UBs is individual savings.
Participants determine how much they can personally save each
month and are required to meet their savings goals in order to
remain in the program.

YSBS and other local non-governmental organizations use funds
received from larger organizations such as Baltimore-based
Catholic Relief Services (CRS) to help fund village banks.
Acting as a CRS counterpart, the local non-governmental
organization oversees management of the village banks, though
participants themselves determine who receives loans and the
amount they receive. This self-management encourages responsible
loan repayment. Indeed, repayment rates in Indonesia are more
than 90 percent and participants generally return the loans
within three to 12 months.

Unlike many aid programs, village banks generate their own
funds and, if successful, can eventually operate on their own.

"The beauty of UBs is that they can become self-sustaining and
that should be the goal of all responsible development programs,"
says Nancy R. Mickelsen, Country Representative for CRS in
Indonesia.

Fr. Charlie Burrows, the energetic Implementation Director of
YSBS, believes UBs do even more than help people attain a level
of financial security. The self-esteem UB members experience once
they have established their businesses is beyond measure.

"If you can get people to appreciate themselves as
individuals, not only will their own lives improve, they will
have an immeasurable effect on others, most importantly, their
children," he says.

Currently, CRS, through its local partners, provides services
to 16,000 UB participants in five regions throughout Indonesia.
Nearly 90 percent of the participants are women ranging in age
from 18 to 50 with two or more children. They operate a variety
of businesses from producing, preserving and selling food to
pottery, handicrafts and making bricks.

For the poorest participants, income from their businesses
ensures only the basics, such as food and clothing. But for
others, like Pariman, the income may have a more far-reaching
effect. She is able to use her profits to help pay for her
children's education. And not only does she have the funds to see
her own family's lives improve, she has contributed more than Rp
1 million to the village bank -- funds that are now lent to other
women trying to establish their own businesses.