In villages throughout rural Indonesia, starting and maintain a family business, even if it’s a small or micro one, is a challenge. One reason for this is that loans for start-up or expansion, come at quite a hefty cost. In talking to CWS staff about her benefits from joining neighbors and friends in the DREAM project, Suriati Roro started her conversation with this: “Before joining the Mawar saving/lending group, I once borrowed money to restock my kiosk from a neighbor at 7% monthly interest, which was quite high and burdening to me and my family.” Ms. Roro explained that she accepted the private loan because, when she had tried to borrow money from the bank, her loan application was rejected because others with her poor profile had not repaid their loans; so, she was considered too high risk. This is not an uncommon story; and, lack of access to affordable micro and small loans is one of the great challenges poor people the world over face together.
Ms. Roro, like countless women in Indonesia and around the world, is resilient. And, like them, she makes do with what she has. Still, she aspires for a better life for her family, especially since her island home of Sulawesi, is highly and increasingly at risk from natural disasters and the economic uncertainty that comes with these risks to make life even less stable. It is because of these combined risks of poverty and natural disaster threat that the CWS-led DREAM program helps families build their resilience and coping strategies for the disasters themselves and for related challenges. And, one key way that DREAM helps is with initiatives like the Mawar group to help women like Roro prepare for shocks in their families’ lives.
Suriati lives with her husband, their oldest child and two grandchildren in Lembang Bau village in South Sulawesi; and, the couple support two sons, who are fortunate to be studying in college. The family income is from traditional Sulawesi work: planting, tending, harvesting and selling rice, cocoa and coffee. They also have a food kiosk near the junior high school where they sell noodles and cakes; though they had to close a larger kiosk at their home because of they decided to no longer borrow from the private lender, which meant they could not keep up their inventory.
“If we depended on our farm income alone, we could not finance the children who are in college; the money just wouldn’t stretch that far,” notes Suriati, and then she adds, “This is especially true for the last couple of years; our cocoa plants haven’t been producing as much as it has in the past, and coffee harvest has also slowed down.” Suriati paints a picture that shows what many families in her socioeconomic class face: gradual changes in South Sulawesi’s climate make it hard to rely on rain-fed agriculture, which they have done for generations. And, as these changes happen, the effect the poorest people the most; so, they need the most support to adapt. One way to adapt, is by diversifying their incomes, as Ms. Roro is now doing. Just two months ago (December 2018), Suriati took her first loan from the Mawar Savings and Loan Group for IDR 500,000 ($35) at a monthly 2% interest rate to buy a variety of items to stock their small kiosk at the school and to reopen the one at their house. Suriati chose to stock goods that sell with a quick turnaround – like gasoline for motorbikes, especially. She stocked up on fast-selling popular vegetables and on cakes and snacks, too. With the family business, the Roro family now nets IDR 35,000 ($2.50) in profit each day; they save some for paying the loan back in full, with interest and on time. And they are paying monthly expenses for the sons’ college education. “I am very grateful for the Mawar Group because it has given my family and me the ability to invest in our future. I plan to apply for a larger loan after I pay off my current one. I want to expand my kiosk business near the school to sell more school supplies, uniforms and shoes.”
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