Women’s Savings and Loans Groups

With the support of small savings and loans groups, some women have set up small enterprises that allow them to buy land, send their children to school, and live in modest comfort and security.

A PEKKA-sponsored women’s group meets to discuss loans and savings programs. Photograph by Poriaman Sitanggang. Copyright 2010 Poriaman Sitanggang / PNPM Peduli.

Introduction

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Widows, single mothers, and abandoned wives in Lingsar often earn as little as sixty cents for a day’s hard work in the rice fields. Some of these women have set up small savings and loans groups.

Lombok is a mostly rural, agrarian society. In the dry highlands, farmers grow corn to feed themselves and tobacco for sale to the cigarette manufacturers. In the lowlands, particularly in the west, where rains are more plentiful and land is more fertile, farmers grow rice, fruit, and vegetables.

In the countryside, agricultural laborers earn between Rp 6000 and Rp 12,000 for a day’s work in the fields. At the lower end of the scale, this is equivalent to around sixty cents a day. People who earn less than two dollars per day are said to be facing “severe poverty”; those earning less than one dollar a day are said to face “extreme poverty”. Earning as little as 60% of the lower figure, the agricultural laborers of Lingsar are, quite simply, some of the poorest people on Earth. Women in Lingsar generally earn less than men. Widows, single women, and abandoned wives often bring up several children on a daily wage that is barely enough to buy a kilogram of rice and some kerosene. More fortunate families may own some chickens to add an egg or two to the table. Otherwise, the rice is eaten with salt and vegetables grown in kitchen gardens.

Even on such wages, most women will make extraordinary efforts to ensure that their children attend school. Even when school is “free,” the cost of books, uniforms, pens, and paper can make it prohibitively expensive.

All of the women from Lingsar in the profiles that follow are heads of households. Most of them are bringing up children and sending them to school. They all support themselves and their families either by working as agricultural laborers, tending tiny plots of land, or running small businesses.

In some cases, the establishment of their small businesses was made possible through their participation in savings and credit cooperatives. In Lingsar, these are operated with the support of PEKKA, “the woman-headed households empowerment program,” which was created to help poor female-headed households in rural Indonesia through programs promoting adult education, economic and political empowerment, and community media.

PEKKA savings and credit groups are founded on the basis of self-sufficiency and mutual support within a clearly defined group. However, the ability of these groups to facilitate economic empowerment has been greatly assisted by the allocation of money from the Direct Community Assistance program. These funds facilitate the making of loans to maintain, establish, or expand small businesses by the women participating in the cooperatives. These loans may be considerably larger than would be possible utilizing only the funds gathered through the contributions of group members.

In the period from 2001 to 2004, funds to the value of approximately Rp 5.2 billion were provided to support the provision of business loans to members of a total of 492 established PEKKA savings groups in districts in Aceh, West Java, West Kalimantan, Central Java, Nusa Tenggara Barat, East Nusa Tenggara, Southeast Sulawesi, and North Maluku. An additional Rp 5.45 billion was provided to these groups in the period from 2005 to 2008.

Laminah

Lingsar, West Lombok, Nusa Tenggara Barat

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The abundant rivers in Lingsar make fish farming an attractive proposition. Elsewhere in Indonesia, women in PEKKA groups raise chickens or goats, or engage in trade and small business. Photograph by Irfan Kortschak. Copyright 2010 Irfan Kortschak / PNPM Peduli.

“Ibu Reni pushed me to try a more ambitious business. She encouraged me to take out a loan to raise fish. After I bought the first pen, I saved money and borrowed more to buy more pens. I’ve got six now. I’ve managed to save up enough to buy some land to build a house.”

When the women first talked about setting up a savings group, the men in the village laughed. They told us we couldn’t even count. They said we didn’t know the difference between a one thousand rupiah note and a ten thousand rupiah note.

I didn’t believe we could do it myself. I remember when Ibu Reni, the PEKKA facilitator, first came to talk to a group of widows and divorcees in the village. It makes me cry to remember now. When she started speaking, there were more than a hundred women there. She hadn’t even finished speaking, and the women started walking out. They didn’t even take their leave, they just walked out. Everyone thought that the idea of a savings group for women was ridiculous. Sometimes even savings groups for men don’t work, so why would they work for women? By the time Ibu Reni finished, there were maybe seven women left. To tell the truth, I was one of the ones who walked out. The ones who stayed were mostly older women, in their forties. They were the ones who were most motivated to save some money.

There are a lot of widows and divorcees in the village. It’s normal for couples to get married when they are very young. A lot of girls get married when they are fifteen or even younger. I first got married when I was seventeen. It didn’t last long. Then I got married again when I was twenty-two. My husband used to hit me. He had another woman and he never worked. He only worked in the harvest season or on the occasional building project. So I asked for a divorce. We didn’t have any children. Back then, when men divorced their wives, the women didn’t get anything. Usually, the women just took the children and maybe some kitchen utensils. They went back to their parents until they got married again. That’s beginning to change. Now women know that they have the right to half of all the property that a couple accumulates while they are married. When I got divorced from my husband, neither of us had any property anyway, so it didn’t matter.

I worked as a laborer. Most of the women in the village work as laborers in the fields or on the roads. Women get paid less than men. Back then, women usually got paid ten thousand rupiah for a full day’s work, lifting rocks or carrying bamboo. Men got paid fifteen thousand rupiah for the same job. Why is the pay different? I don’t know. They always said that women aren’t as strong, they don’t work as hard. They say women are weak.

After I got divorced, I joined one of the PEKKA savings groups. I used to put one or two thousand rupiah into the system every month. At first, I never borrowed any money. I didn’t dare to. You have to show that you can save money before you can borrow anything. You have to save regularly first. Each group has some savings from the contributions of members. If one member doesn’t have enough money to buy rice, then they can borrow a small amount for that. Before the savings group, if women didn’t have enough money to buy rice, they often sold some plates or other items from the kitchen, or they sold some clothes.

If you save regularly and pay back your loans, you can borrow larger amounts. Larger loans are only for business. If the group approves your application, you can borrow more money. The water in Lingsar district is good and there are a lot rivers. A lot of people in the district raise fish in bamboo cages in the river. Some women borrow money to raise fish, others to become small traders, selling vegetables and fruit. Usually they carry it in pans on their heads and sell it from place to place.

After I was in the group for a bit more than six months, I borrowed several hundred thousand rupiah so that I could do that kind of trade. I was very nervous about it. I don’t even like to owe anyone five or ten thousand rupiah, so I was very nervous about borrowing more than that. But I did make some money by trading. I made enough to pay back the loans, but I still had to keep working as a laborer as well.

I continued to participate with the savings group, too. I also took part in the PEKKA educational program. Only one or two of the women in the group had even finished primary school. I didn’t finish primary school. Neither did my sisters. Some of my brothers went to high school, but none of my sisters did. That’s the way things are here. People say it’s not important for girls to go to school, for they’re only going to get married and have kids.

When I joined the savings group, I couldn’t even speak Indonesian properly. I could understand it if I heard it, but I couldn’t speak it. I learned the alphabet at school, but I never put it into practice. In the educational program, we revised what we knew. I learned to sign my name properly. There were some booklets in Indonesian about legal rights for women, and we learned to read them. The language isn’t too difficult, and the peer teachers explained it as we went along. The facilitator encouraged us to use Indonesian, too. She always speaks Indonesian to us, even though she’s from this region herself. After I was in the program for a while, sometimes I took a turn to act as a tutor for women who had just joined. That’s the way it works. I was very proud that I could teach other women, even if I hadn’t even finished primary school myself.

After I’d been in the savings group for a couple of years, Ibu Reni started pushing me to try a more ambitious business. She encouraged me to take out a loan to raise fish. I was still very nervous about going into debt. But I borrowed two million rupiah to set myself up. The bamboo pen cost Rp 700,000; the rest was for fish stock and food. It takes three months to raise a batch of fish until they are ready to sell. If you are lucky, you can sell the fish you raise from one pen for Rp 1 million, but that’s not all profit. You have to deduct the cost of the food. And sometimes some of the fish get sick and die. After I bought the first pen, I saved money and borrowed more to buy more pens. I’ve got six now. It’s hard to say exactly what the profit from it is – maybe one or two million rupiah per month. I’ve managed to save up enough to buy some land to build a house. It’s only fifty square meters, but I bought it myself, from the money I made myself. I didn’t inherit it, I bought it with my own money.

I’ve bought another fish pen together with one of my sisters. I’m always encouraging my sisters and my family to join a savings group and set up their own business. I’m the youngest of all my sisters. I always tell them that if I did it, they can do it too. Sometimes they are nervous about borrowing money. Is it easier for me because I don’t have a husband? [Laughs] Maybe! My sisters have to prepare meals for their husbands and children when they get up and then look after the house. They have to look after their husbands and their children first. I can go straight down to my fish pens to look after my fish instead!

Yes, I’d get married again, if I met the right man. But if I don’t meet the right one, I’m better off staying single.

What do I need to make my business grow now? What we need most is training in fishery skills from the department of fisheries. The biggest risk is from disease. It usually kills the biggest fish and leaves the smallest ones. You can mix in medicines with the food to prevent it. We need more training to learn how to use the medicines properly. The other thing that would help is if we set up some kind of cooperative to buy fish food directly from the supplier in Surabaya, rather than buying it in the local markets.

I don’t have any problem with the men in the village. If I sell the fish in the market, I get the same price as the men do. They don’t laugh at the savings group now. Their attitudes have changed. Most of them support us. There’s still one ulama in the village who doesn’t like the savings groups. He says PEKKA teaches women to talk back to their husbands.

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