Indonesia: When women control their own investments

Flickr-photo "Scale" by deepchi1

Flickr-photo "Scale" by deepchi1

Indonesia managed to weather the latest economic crisis and is now even a contender for the BRIC nations. What exactly was the secret of the world’s most populous Muslim-majority nation? More than half of Indonesia’s 230 million people are women.

The majority of Indonesian women still adhere to their principal societal roles of being a wife and becoming mother. Although the trend is changing, most of the time women are still not included in decision-making nor are they demanded to contribute to the family’s well being; working is an option but not compulsory – thus financial independence is not absolute.

In the villages, parents marry off their daughters in hopes of securing their future. This practice leads many women poorly educated and left with few options in life. Women are often classified as “unskilled laborers” – working in the factories or sent abroad to work as maids – but their contributions to the state’s coffers have been overlooked and their rights haven’t been properly acknowledged.

In the past years, Indonesian women have inspired one another and showed that they too can ace in areas mostly governed by their male counterparts. One of Indonesia’s inspirational women is the former Finance Minister Sri Mulyani Indrawati, who is currently the Managing Director of the World Bank.

A 2008 report published by the Indonesian Bureau of Statistics said that there are 46-49 million Micro, Small and Medium Enterprises (MSME) in Indonesia, and 60_80% of them are owned by women. Those MSMEs represent 97.1% of the country’s labor force.

Similar to women in Africa or South Asia, Indonesian women also face challenges, like taking a bank loan without male guarantor, or if they fail to demonstrate that they are creditworthy.

Fortunately women do stick together in this country, and a strong presence of camaraderie among women can be felt in rural or urban communities.

On his blog, Son Haji Ujaji [id], an activist based in Tangerang, West Java, highlights how women have the capacities to increase the family’s income:

Perempuan akan mengambil peran-peran penting dalam kapasitasnya sebagai makhluk sosial, terutama dalam rangka peningkatan kualitas pendapatan keluarga. Lembaga-lembaga local yang ada lebih tepat bila diperankan secara langsung oleh kaum perempuan, baik yang bergerak dalam bidang sosial maupun ekonomi. Sesungguhnya kultur perempuan yang ada pada sebagian masyarakat Indoensia adalah bersifat guyub (komunal). Kuatanya daya komunalitas ini tercermin dari masih eksisnya lembaga-lembaga yang bergerak dalam bidang kewanitaan, seperti PKK, Posyandu, bentuk-bentuk arisan warga dan sejenisnya.


PKK mempunyai prioritas program berupa Usaha Peningkatan Pendapatan Keluarga (UP2K). […] Potensi, daya, dan karakter perempuan yang tidak kalah penting dan bobotnya dengan laki-laki dapat menjadikan program UP2K-PKK sebuah program unggulan dalam tataran program social safety net (jaring pengaman social), sebagai salah satu upaya menolong masyarakat dari keterpurukan ekonomi dengan jalan memberdayakan dan membangun masyarakat menjadi individu atau keluarga yang mandiri.

Women are, by nature, highly sociable and they will take active roles in order to improve the household income. Local activities are better to be managed by women. Culturally, the Indonesian women have a strong understanding about the importance of community, this reflect in many communal programs such as PKK (author’s note: courses for housewives, including sewing, gardening, first aid, etc.), Posyandu (author’s note: community health center), and arisan (author’s note: private betting, strictly among friends and family) that still exist today.


PKK currently prioritizes Income Improvement Program (UP2K-PKK). […] The program, which highlights women’s potentials, their will power and characters, made itself a primary definition of social safety net, a way to help the people from poverty and empower them to be a strong and independent individuals as well as family unit.

Generating income online and offline

Koperasi (cooperatives), a business institution founded by a group of people, governed democratically and aimed for mutual benefits, is regarded as one of the cornerstones of Indonesian economy.

Over the years, the basic principles of Koperasi are pretty much ingrained in the people’s mind. Although Multi Level Marketing (MLM), doesn't have identical values as Koperasi in acknowledging the importance of community and network, it is also considered as a great way to generate alternative incomes. People don’t necessarily go to MLM meetings to buy; they come to network, to find new opportunities or business partners over gossip, tea and cakes.

After presentations and catalogues for MLM came blogs and Facebook. The ladies quickly found a new place to market their crafts, imported Korean sundresses, or even last season’s Jimmy Choo heels and other luxury goods at discounted prices. Generating extra income is becoming as easy as tagging pictures.

Does microcredit work in Indonesia?

Microcredit, in practice, is not always a silver bullet against poverty in Indonesia, on the other hand new jobs would be.

International micro-credit organizations like Kiva aim to empower impoverished women and their communities through lending; this, however is not a simple task.

A netter nicknamed salman_taufik made a comment on a post appeared on Stanford Social Innovation Review. He has an excellent insight about why micro-finance is not quite a success story in Indonesia:

I have similar finding in macro level for Indonesian cases. During last decade after crisis 1988 – 2009, poverty only slightly downed from 21% into 14.15% by 2009, despite controversy over this statistic. Meanwhile, the credit growth into micro entrepreneurs increase 7 times during 2000-2009, much more higher than overall banking industry which only twice for the same periods. Contrasting of both figures bring me into question the effectiveness of microfinance to alleviate poverty. Since some the credit flows into micro entrepreneurs are consumer loans, I suspect that the rapid growth just showed how success capitalism sell their consumer goods into the poor such motor cycle, cellular phone, home appliances, etc, and the poor sell their land and cut illegal tree to pay all those stuffs. Furthermore, even though micro finance give access for poor people to have capital or liquidity but they have to pay almost twice than corporation. I just think that there have been money slavery over the poor. So somehow I agree with you unless they don’t charge the money, let it as working capital to save their lives.

In a country where many still earn less than US$ 2 a day, foreign financial aid is often misunderstood by poor communities.

Anna Antoni, a Kiva fellow based in Bali explains:

The fear of the Kiva field partner where I serve was if borrowers know that their loan comes from abroad, they will think it is charity. They will not feel obliged to pay back their loan and it will cause long term problems even if the loss is not covered by the field partner. There is a damage industrialized countries have made through aid that goes far beyond support in crises, taking away something from a spirit of “I can do this- I can handle the challenges in my life!” which is so important in microfinance… but back to transparency.


The whole process showed again how big the influence of Kiva can be. For most developing countries it is a shift of paradigm not to receive funds that either don’t have to be repaid or be repaid under heavy conditions. Putting a lot of effort into raising the transparency for borrowers and thus showing respect to all people participating in the mission of Kiva is more than important. Besides fulfilling the value of microfinance to help people to help themselves, it is the basis for a new approach to development.

Indonesian female entrepreneurship is an interesting fact. Unfortunately the fact seems to have gone unnoticed by local netters as this author (me!) struggled to find blog posts that include testimonies or opinions about the unsung economic heroines. Have I missed some great stories published on the net? If so, please let me know. Your links, opinions, and insights are highly appreciated.

This post also appears on UNFPA's Conversations for a Better World where Carolina will be updating a live-blog about female entrepreneurship, courage and investments (worldwide) throughout the next week. Please share your projects, links and experiences there.

1 comment

  • Lisa

    Thank you for such an uplifting post! I have to say that I was shocked to learn from your post that Indonesian women still need a male guarantor in order to take a bank loan. Did this fact surprise anyone else?

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