Relief Effort Indonesia Earthquake of May 27, 2006

Recovery of Social and Economic Problems through Community Saving Development At Birit Village, Wedi District, Earthquake Area in Klaten, Central Java, Indonesia

New:Updates available for Community Savings Grantées.

Jl. Semangka 27 Kerten Solo Ph. Fax. 62-271-740764

Final Narrative Progress Report May 18, 2007 to September 17, 2007 By Akbaroedin Arif

Resource Grant: Real Medicine Foundation (RMF)
Institution: KOMPIP
Duration of the program : 4 months – May 18, 2007 to September 17, 2007
Geographic area: Birit Village, Wedi District, Central Java
Report submission: October 22, 2007

1.1. Purpose
Disaster Mitigation through Community Saving in Earthquake Area, Birit Village, District Wedi, Central Java Province.

1.2. Target of the second and third month
Grant distribution. Start of loan and saving activities at neighborhoods.

1.3. Activity
a. Village meeting for social preparation
b. Neighborhood meetings to shape neighborhood based community saving
c. Village meeting for 1st grant distribution
d. Neighborhood meeting II to start loan services
e. Village meeting for grant distribution III
f. Neighborhood meetings to distribute loans of 2nd grant

1.4. Achievement based on Target of Activities (Output)

1. Village meeting I was held on May 19, 2007, facilitated by Akbaroedin Arif from KOMPIP and Nick Taranto from RMF. All 17 neighborhoods sent their representatives. All of the representatives were very enthusiastic to follow the program. At the end of the meeting, all neighborhood representatives signed a letter of commitment to follow the program and to succeed. During this first meeting, there was a lack of female attendance. None of the women villagers attended the meeting. It is recommended that for the neighborhood meetings there should be a focus on inviting women.
2. All of the 17 neighborhoods have held the first neighborhood meetings. The activities range from Monday, June 4 to Tuesday, June 19, 2007. The activities have involved 356 people; 213 of them male and 143 female. 40.1% of the participants were women, which is a big success.
3. Village meeting II was held on August 14, 2007, facilitated by Pargito and Lusy from KOMPIP. Village meeting II was attended by 36 villagers; 16 male and 20 female. The number of female participants has increased compared to village meeting I as at that meeting, all participants were men. As its aim, the meeting successfully distributed grants to 17 neighborhoods. Each neighborhood received 1,5 million rupiahs. KOMPIP plans to distribute the grant twice. The first grant has been distributed at village meeting II. While the second grant of Rp. 1,000,000 per neighborhood will be distributed at village meeting III.
4. Several neighborhoods started to have loan and saving activities at neighborhood meeting II.
   *Membership savings range from Rp. 5,000 to 10,000
   *Monthly savings range from Rp. 1,000 to 3.000
   *Interest ranges from 0.5 to 2% per month
   *By September 12, there are 258 male and 249 female members. Total members are 507 people.
   *There are 119 male borrowers and 126 female borrowers. Total borrowers are 245 people. Most of the borrowers use the funds to improve their economic life.
5. Village meeting III is held on Sept 12, 2007. The meeting is used to review the progress and distribute the second grant of Rp. 1,000,000 to 17 neighborhoods. The meeting is attended by Erica Karapandi, RMF’s representative in Indonesia.
6. All 17 neighborhoods in Birit completed neighborhood meeting III, where the loans of the 2nd grant were distributed. All neighborhood meetings III were completed in the time from September 14 to through October 5, 2007. The meetings were attended by 167 male and 178 female participants. The total number of members attending the neighborhood meetings was 345 people. The main purpose of the 3rd neighborhood meeting is to distribute the 2nd grant. There were 165 new borrowers who received their grant during the 3rd neighborhood meetings.
7. Borrowers by October 5, 2007 are 245 from the first grant and 165 from the second grant. Total borrowers are 410 members.

1.5. Outcome. Change initiated by KOMPIP-RMF at Birit Village during the second and third month of intervention
KOMPIP-RMF has shaped 16 neighborhood community savings and strengthened one existing neighborhood community savings at Birit Village.
There was a significant change of women’s participation at the neighborhood gatherings. Female attendance at the village meetings increased from zero female participant to 20 women participating (and 16 male participants) to 19 female participants (and 17 male participants). Women now are taking on a significant role in deciding about neighborhood community savings policy.

1.6. Constraint and Learning
Our program ran from May 18, 2006 through September 17, 2007. One neighborhood couldn’t schedule a neighborhood meeting within the duration of the program. Neighborhood 17 completed its meeting on October 5, 2007. Consequences of this delay have led to the necessity for the field staff to stay longer at the location and to the delay of the report submission. The delay was also influenced by the annual Idul Fitri holiday, an Indonesian holiday of one week. This year’s Idul Fitri holiday lasted from October 13 through October 21, 2007. Not all members are always able to attend the monthly meetings. It is not easy to find a schedule that fits all members. In the future, field staff has to discuss these issues with the community so the attendance at the meetings is higher. Neighborhood 17 delayed the neighborhood community savings meeting III since the chairman used the 2nd grant for family business. Lusy approached the chairman and succeeded to distribute the 2nd grant on October 5, 2007. Continuous monitoring and mentoring is needed so that such incident may not happen after the field staff leaves the locations. We decided that in the future, funds will not be allowed to be kept by the chairman. Funds will be safe-guarded only by the treasurer.
Membership has increased positively. After neighborhood meeting III 51 new members registered. Now there are 507 plus 51 members in Birit Village. By neighborhood meeting III, the number of members had increased 10.059%. Birit is famously known as ’difficult communities’. The trend of membership shows that the community savings system works in a ’difficult village’.
Birit was chosen as program area for different reasons than Mlese Village (RMF-KOMPIP’s early program area). If Mlese had been chosen because of the cooperativeness of the community, Birit had been chosen for the opposite reason. Nick for sure remembers that the Village Head did not attend village meeting I. Pargito and Lusy witnessed that he neither attended village meeting II. But Erica could witness that he did attended village meeting III. This trend also shows that Birit as ’difficult community’ has gradually increased their positive responses to RMF-KOMPIP’s program.
There are only 9 borrowers who have not returned the installment. Most of them did not attend neighborhood meeting III so that the reason why they did not pay back is not yet clear. If compared to the total number of borrowers, there are only 2.19% who failed to return the installment on time. They failed to pay on time, but have not yet proven if they cannot or will not pay the installment. Debt collectors in each neighborhood will work to approach those who failed to pay the installment. However, this finding strengthens our belief of the need of continuous monitoring after the field staff leaves Birit.

• Report of Village Meetings, May and June 2007

Update June 2007
By Akbaroedin Arif and Carly Panchura

I. CONTEXTUAL BACKGROUND

An earthquake measuring 5.9 on the richter scale hit Jogja and Central Java province in the early morning on May 27, 2006.  The Local Government Disaster Mitigation Office in Satkorak Klaten reported that 1,045 victims died, 18,127 victims were injured, 98,552 houses were partially damaged, 62,979 houses were severly damaged and 29,988 houses were completely destructed. Satkorlak reported that the earthquake devastated public infrustructure as well as individual homes -- 439 public buildings were partially damaged, 430 public buildings were severely damaged, and 76 public buildings were completely destructed.  The earthquake impacted more than physical matters; it also caused the destruction of social and economic activity.

KOMPIP (the Consortium for Monitoring and Empowering Public Institutions) is providing agency funding to support the infrastructure. KOMPIP is a Central Java-based non-governmental organization committed to facilitating the democratic process and alleviating poverty on a grassroots level. It has a proven commitment to developing community economic sustainability, working with marginalized peoples, and promoting the democratic process.  Since 2003, KOMPIP has developed and expanded a unique version of micro-lending which the organization calls Tabungan Rukun Tetangga (TRT, or neighborhood community savings). Through a three-step process involving poverty information system mapping, work-plan development and the allocation of a "stimulus grant", KOMPIP proposes a strategy of sustainable support by providing the community with skills and knowledge on community saving.

The benefit of community saving is in keeping capital steady for long periods of time. More powerful than cash support, it keeps financial capital/earnings within the community which accumulates over time.  Community saving is flexible in supporting various needs. It lets people freely but properly determine their social and economic needs. 

Early support from the Real Medicine Foundation at Mlese Village proved that various social and economic problems have been mitigated by the provision of capital through these community saving programs. From the findings it is interesting to note that people in general did not want to accept more than between $10 and $80, since they fear they would not be able to pay back a bigger sum as that would be culturally shameful. RMF used a self-regulatory process and has had a  99% payback rate.

II. Program Location

Birit is one of a hundred villages destroyed after the earthquake in Central Java. More than 80% of the houses in this location were severly damaged. Social and economic infrastructures were destroyed and many people lost jobs. What remains has been spent on recovery of their houses.  People are just now beginning to participate socially and have economic gains.  Most of the people live as industrial and farm laborers in the tempe and tofu industry, or as food vendors and clothing tailors.  They are still in need of support to mitigate their many burdens. The following is some data on the Birit Village.

III. Purpose of the program:

The general purpose of this proposal is to build capacity for social economic recovery through community saving.

IV. Activities:

A. Village Meetings for Program Orientation, Monitoring and Evaluation

A village meeting will be held at the beginning, middle and at the end of the program. The first meeting will be used to introduce the program to the public, ask for agreement from the community in moving forward with the program, and to schedule the first neighborhood meeting. The meeting mid-way through the program will be used to monitor the progress of the community saving and to check for potential borrowers. This meeting will also be used to distribute the grant monies. The last meeting will be used to evaluate whether the program has met its target and to identify future revitalization projects.

B. Neighborhood Meetings

There will be three neighborhood meetings. The first neighborhood meeting will be used to introduce the program to neighborhoods, shape the management team and build capacity on book-keeping. The second neighborhood meeting will be used to registrate members, build regulation, and identify potential borrowers. The third neighborhood meeting will be used to distribute the loans to potential borrowers.

C. Survey of Family Income

A survey of family income will be performed to determine poverty levels. This information is expected to be used as a pilot for the poverty information system. In the future, this data may be used by decision-makers in the communities in order to put more recognition towards prioritizing people in high poverty.  This survey is done by field facilitators doing mentoring of members of the community saving project. The survey is targeting 100% of the households in this village. RMF requests continuous surveys and updates, and follows up on the grants that have already been given out.

D. Production and Dissemination of Community Saving Tool

Learning from experience during the early support from RMF, it was determined that community members needed guidance so that they can move forward even when field mentors do not stay at the location. Guidance for the community members and grantees is provided on how to build their micro business, how to pay back the loans, and improve their capacity, knowledge and spirit of community saving in order to achieve the highest possible success rate.  A calendar is distributed to 100% of the households at the village to keep themselves on schedule. The production of these calendars also works as a marketing campaign for RMF and KOMPIP.

IV. Specific Purposes

• Developing community saving at neighborhood basis
• Building capacity of the community in managing fund and organizing the neighborhood saving
• Mitigating the people though saving and loan for social and economic puprposes.
• Developing early basis for poverty mapping

V. Program Outputs

• Completion of village meetings
• Completion of the neighborhood meeting
• Completion of the family income survey

VI. Program Outcomes

• New situation and behavior to reveal during and after the program are:
• Existence of new and prospective financial institution at grass root institution
• Working community saving and loan indicated by the exixtence of saving and borrowing
• Improvement of community togetherness in solving social and economic problems

VII. Budget

The budget proposed for this program is USD $11,790 or Rp. 101,400,000 (1 USD = Rp. 8,600).