Update from the Field

June 30, 2007

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. 

Population 2267
Neighborhoods 17
Households 822
Sub-villages 7
Completely damaged houses 685
Severly damanged houses 113
Partially damaged houses 24


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.

V. 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

VI. Program Outputs

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

VII. 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

VIII. Budget

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