Empowering women in Indonesia through financial inclusion
Mimin Among wears a broad smile when talking about how she earns a living making krupuk (Indonesian deep-fried prawn crackers): “We started a small business in 2004 after years of working for other people. We joined the Komida cooperative in 2009 and used our first loan to buy woks which we still use now. The business is doing well and we employ 10 neighbours to help us keep up with demand.”
Working together with her husband Ajo at home in Jonggol, West Java, Mimin has seen her krupuk business grow steadily since she became a member of Komida. Koperasi Mitra Dhuafa (Komida) is an Indonesian cooperative providing financial services to women entrepreneurs on low incomes in rural areas who have no access to banks and the formal financial sector.
Huge demand for financial inclusion
In 2016, Indonesia’s Financial Inclusion Survey carried out by its Financial Services Authority found that only a quarter of Indonesia’s population had access to formal financial services. And while the gap has narrowed since then, there is huge unmet demand for financial literacy and financial inclusion.
Oikocredit partnered with Komida in 2016 in view of its ambitious plans and positive social impact in the region, and to support the cooperative’s efforts to grow its lending operations. Komida is one Indonesia’s biggest cooperatives in the financial inclusion sector and is on course to meet its target of serving one million low-income women by 2020.
Tes Pilapil, Regional Director of Oikocredit’s Southeast Asia office explains: “Oikocredit chose to invest in Komida as its goals align with Oikocredit’s own strategy of supporting organisations which promote and improve financial inclusion. It provides access to credit and savings for low-income women micro-entrepreneurs.”
Komida’s overall objective is that these services will help its client-members to improve their income, health and education. It targets disadvantaged women primarily via group loans but has six other loan products including both compulsory and voluntary savings products, plus one insurance product.
A range of loan products
In line with its responsible lending methods, new client-members of the Komida cooperative start by obtaining a “general loan” (a group loan), and later, as the client progresses, she can apply for one of a range of other loans. Komida loans are granted only after careful analysis of the clients’ needs and requirements.
Another ingredient in Komida’s success is that it uses client feedback to determine the types of loan that it makes available. In 2017 Komida introduced its Housing Renovation loan scheme which has proved popular among small-scale entrepreneurs like Mimin Among.
The loan is not limited to house improvements but also covers the renovation and improvement of the client-member’s place of business which might be a kiosk, store or market stall. Moreover, if the house to be renovated does not have a toilet and clean water facilities, a Water and Sanitation loan is bundled with the Housing Renovation loan, after careful consideration of the borrower’s circumstances.
Komida’s support improves lives
When they started out in business, Mimin and her husband Ajo Among did all the work themselves. Now, 15 years later, after benefiting from nine loan cycles and with a team of 10 employees, they make daily and weekly deliveries to 30 shops at three markets.
Mimin Among explains further: “Joining Komida helped us to expand the business, and eventually we were able to buy the land where we live and send our five children to school. We want our children to have a good education and be successful in their future careers. I also really want to renovate our kitchen.”
Mimin’s current loan of IDR 15 million (around € 900) for a period of 50 weeks is being used to buy raw materials to continue to grow her business. Komida’s support to its women clients goes further than loans; clients benefit from a range of training programmes such as financial literacy, business development and even reproductive health.
Dreams come true
In the kitchen outside the house we see Mimin’s large woks being put to good use to fry the krupuk. Within seconds, delicious-looking large prawn crackers are produced. It is easy to see why the instant crackers are popular with her customers. In the porch of Mimin’s house, her team of women workers wrap the krupuk in bags.
There’s no stopping Mimin. Her dreams of a bigger, better kitchen to improve the efficiency of her krupuk business and increase her output have moved one step closer to reality – she recently applied for a Housing Renovation loan.