#PSF Workshop on The Model of Linkages in PNPM DAPM Part I: For Indonesia from Central Java

Dissemination and workshop on the model of linkages  in PNPM Mandiri Community Empowerment Trust Fund (DAPM)

Semarang – Central Java, August 13-14th, 2014

Innovative ideas are being offered to solve problems related to limited access to financing.  Financial linkage in PNPM Mandiri has been initiated in partnership with the banking sectors, insurance companies, and other financial services and found across Central Java, Sumatra, and East Nusa Tenggara (NTT).

The central and regional governments, including those from the regency level, together with the private sectors, communities, and consultants of PNPM Rural and Urban, met in Semarang, Central Java on August 13-14th, 2014.   The workshop aimed to discuss alternative ideas to open more access to finance for the small enterprises.  The meeting was designated as a dissemination and workshop on the model of linkages for Community Empowerment Trust Fund (DAPM).  The program targets PNPM stakeholder across Central Java.

Semarang 1

“Let’s work hard to find a model of linkage for the Community Empowerment Trust Fund in Central Java so that it can help people to get out from the poverty,” said Central Java Governor, Ganjar Pranowo.

Since 1999, PNPM Mandiri, with its previous programs (PPK and P2KP) has provided revolving loan funds for communities.   As of September 2011, the total of revolving loan funds distributed was Rp6.6 trillion, with more than 440,000 borrower groups (or about 4 million borrower individuals).

As of December 2011, PNPM Mandiri Rural has managed revolving loan funds totaling Rp530 billions, with more than 324,000 borrower groups (or about 1.6 million borrower individuals).

“The total beneficiary of PNPM revolving loan funds in Central Java is 100,325 groups.  Total funds distributed for the saving and loan program is Rp1.85 trillion,” explained Ide Sasongko, provincial coordinator for PNPM Rural Central Java.

As Indonesia welcomes a new president, PNPM Mandiri continues to provide revolving loan funds for productive but poor people, with certain adjustments.

“People are happy with the work of PNPM.  That’s incredible!  But with our current president’s term in office ending on October 20, we must think of the lives of PNPM community assistants.  Central Java is ready to come up with a concept about PNPM autonomy,” said Ganjar.

Groundbreaking ideas from Central Java

According to Statistics Indonesia (or BPS) in Central Java, the number of people living in poverty in Central Java was 4.836 million people (14.46 percent) as of March 2014.  This number marks an increase of 25.11 thousand people (0.02 percent) compared to the number from September 2013, which was 4.811 million people (14.44 percent).

“I asked my staff for data, such as how many people are poor, who they are, and where they live, so I can group them in clusters.  This will help us in making public policy that can be applied structurally, systematic, and massively,” Central Java Governor, Ganjar Pranowo said.

The government of Central Java is preparing strategic steps on poverty alleviation before the new village law is applied in 2015.  They have a special budget for villages providing various amounts of funds depending on the village’s situation.  This is a way to prepare the local governments to manage larger amounts of funds as provided in the village law.

Ganjar explained that by preparing a simple financial report system – one that is easy for villagers to understand – problems in fund management can be prevented.  The government will provide a year of training for villagers.

Semarang 2_0

It’s me on the right :p

“We have the instrument, which is PNPM.  We have the Trust Fund.  And we have the One Village One Product program.  I hope that there will be trading between villages as well as between sub-districts,” Ganjar said.

Central Java has been called a pioneer in decentralizing PNPM programs as it has shown good practices.  Sujana Royat, Deputy Minister of the Coordinating Ministry for People’s Welfare for Poverty Alleviation, said that Central Java is a good example.  He mentioned its town of Kebumen, where nearly 100 percent of its small businesses are operated by women.

“Central Java has become a new model for PNPM.  The central government no longer makes decision for the province.  We have the governor to communicate with the central government.  The governor controls PNPM activities in all of Central Java,” said Sujana, who is also the Head of the National Oversight Working Group for PNPM.

Sujana Royat believes that under the leadership of Ganjar Pranowo, the government of Central Java can reach out to all people living in poverty in the province.

“With this decentralization, we want to be better than PNPM.  Our target is to have no poor person that doesn’t get help,” he explained.

Dra. Rahma Iryanti, MT is Deputy for Poverty, Manpower, and SMEs for Bappenas.  She said that Central Java’s strategy can overcome the challenge of poverty alleviation in 2015-2019.  Stronger decentralization and synchronized poverty alleviation programs should be undertaken by various parties, including communities and the private sector.  The RPJMN 2015-2019 should focus on inclusive, fair, and sustainable growth by strengthening the competitiveness of real sectors on micro, small, and middle-sized enterprises.

Prof. Gunawan Sumodiningrat, MEC, Ph.D is a senior consultant for DEFINIT.  He reminded PNPM actors about PNPM’s goals.  He offered three key principles, which he called “Tri Bina”.  The first is to prioritize education (Bina Manusia) so people can improve their capacities and qualities.  The second is financial resources (Bina Usaha) about providing access to financing through saving and loan programs.  The third is environment (Bina Lingkungan), the building of infrastructure facilities.

“Community empowerment must come from the grassroots.  Central Java is ready to be a model,” Gunawan said.

Gunawan, who’s also the head of People’s Economy Desk at Gadjah Mada University, delivered his critique about PNPM.  He said that supporting people to be self-reliant is supposed to be PNPM’s priority, not infrastructure development.  He also criticized the Activity Management Unit (UPK) saying it’s been working like a cashier while it could be a trendsetter on financial management.  Regarding PNPM assistants, he said that they should work harder on helping communities to be self-reliant.

“The goal of the community empowerment national movement is to move people toward prosperity, where they can create job opportunities and increase their income.  They should be able to find jobs and to save money,” said the expert staff for Bappenas.

Read Part II Empowering the community by developing a linkage

My writings for PSF website.

Source: http://pnpm-support.org/news/workshop-model-linkages-pnpm-dapm-part-i-indonesia-central-java

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