Status
Status:   Completed
Completed
 
Summary
Summary

This is the fourth operating year of RMF and KOMPIP’s joint NEF program. Out of 198 original neighborhoods in Yogyajakarta and Klaten, Central Java, 193 continue to operate with a membership of 7,000 people. This community-owned revolving fund initiative provides its members with access to small loans for micro-enterprise purposes. Each neighborhood has its own fund and democratically elects three to four people to administer the fund voluntarily, acting in the capacities of leader, treasurer and secretary. The amount received by each neighborhood is generally sufficient for two simultaneous borrowers of up to US$100 each and at a monthly interest rate of 1% to 1.5%.The neighborhood structure that is already in existence is the pillar of the program. In Indonesia this structure is known as the “RT-RW” system of socio-geographic organization. Each defined geographic area is divided up into neighborhoods that are identifiable by this RT-RW marker and these cohesive neighborhood groups are instilled with a communal sense of ownership and responsibility of their NEF. Each group collectively decides which members of their community will be granted loans for micro-enterprise purposes, thereby removing the need for any outside entity to carry out credit risk assessments.

KOMPIP staff and/or its large and growing base of volunteers make field visits during a training and mentoring period of four to six months. During this time, bookkeeping and administration training for NEF-level elected representatives is provided. Additionally, bookkeeping, micro-enterprise management and marketing training is given to borrowers.Loan repayment rates have been close to 100% and NEF communities have responded well to KOMPIP’s holistic approach. Additionally, in all 193 neighborhoods the revolving funds have grown substantially larger, allowing for increased access and larger loans. Due to the extraordinary success achieved, measured by increasing incomes and standards of living, KOMPIP is in the process of replicating its NEF model to the entire Surakarta area, encompassing 2668 neighborhoods and 500,000 people. In order to facilitate this expansion, a seed grant of $240,000 has been pledged and disbursed by the local government of Surakarta and a partnership between the mayor’s office, RMF and KOMPIP was established in late 2009.

Related files:
December 2009 Brochure

 
 

Recent

Reports