Today was the last class of my MBA.
On the last class my lecturer talked about Bank Perkreditan Rakyat. A small bank which loans up to 1 Million rupiah the rough equivalent of US$ 100 at the time of writing. The debtors are usually people on rural areas, and some of the BPR only lend to women living in poverty. I’ve read the case study of Grameen Bank of Bangladesh founded by M. Yunus a couple semester back, but hearing how it works in Indonesia are quite different and personal.
A lady borrowed Rp. 100.000,- ($10) from the loan sharks, bought a couple hands of banana, carry it over to the market and sells it for a profit of Rp.50.000,- to Rp. 60.000,- ($5-$6). They give back to the creditor Rp.130.000 ($13) to the creditor only keeping only Rp.20.000 to Rp.30.000 ($2-$3)
In the rural areas many workers living under poverty borrowed money from loan sharks that charges 30% interest a day. They borrow these money as a working capital to fulfill their daily needs. This practice locks the debtor in their poverty line as they can only make ends meet. They have no savings for their future, they live only what the day provides.
BPRs on the other hand lends up to Rp.1.000.000,- ($100) for an interest of 30% a month with no collateral. It’s still monstrous for banking standards, but I think it keeps a healthy pressure for them to be frugal about it. The same lady in the story took a loan from the BPR and finally managed to open a stall in the market and buy a bicycle to transport her goods.
A million rupiah can buy me a couple extravagant dinners or rounds of drinks in the city, or maybe buy me a game or two. To me its my pocket money for the month, to some it’s small change, but to others out in the rural areas it’s their future. I’ll lend a million rupiah every month if I could change one life.
I give money to beggars, especially after I saw the reality of organized begging with my own eyes. But I’ll gladly help anyone kickstart their future. I want to see people realize their potential.
Some of my teachers labelled my business as noble, but unsustainable. I guess I’m not a very good business student, but thanks to my teachers, I realize that in order to help people, you need to keep having 1 million rupiah.
What can you do with 1 million Rupiah ?