“Mitra Bisnis Keluarga” (MBK) – which stands for “Family Business Partners” – is a non-bank financial company (NBFC) regulated by the Ministry of Finance. Its mission is to provide working capital to low-income households in Indonesia in order to raise their family income and living standards. Working capital is provided to individual women through groups. Many of the clients are landless labourers, and are involved in petty trade, preparing and selling food, livestock rearing and vegetable growing. MBK transformed itself from a foundation called “Ganesha Microfinance Foundation” at the end of 2006. This foundation operated from 2003 to 2006, and reached about 28,000 clients by end of December 2006.
Even by conservative official estimates, there are 10 million poor households in Indonesia. There are a further 10 million vulnerable self-employed households whose income hovers just above the poverty line. A World Bank poverty report on Indonesia estimated that half of the total Indonesian population of 240 million fell below the $2 dollar (purchasing power parity) poverty line in 2006.
Along with other microfinance institutions around the world, MBK believes that the availability of working capital is one of the most effective and direct weapons to fight poverty and inequitable income distribution. The central assumption is that the poor have developed survival skills and are prepared to work hard. However, they have more skills and time than they can use. Also, poor people do not receive the full value of their work, because moneylenders, who often charge 5 to 10 per cent interest per month, take away a significant portion of their income. In fact, interest payments of 30 per cent per month on very small loans are not uncommon in Java.
MBK uses the Grameen Bank approach to extend working capital of US$ 100-300 to poor women. This approach is particularly well suited to Indonesian conditions. With a total population of 230 million, the labour force consists of 98 million earners. Of these, only 26 million persons (27 percent) have regular jobs. The remaining 69 million persons (73 percent) are either self-employed or casual and seasonal workers in construction and agriculture. Poverty in Indonesia is therefore not primarily a problem of low wages for regular employees, but of lower income for the majority of earners who are self-employed. One of their major constraints for them is the lack of working capital to combine with their labour to produce higher incomes. The availability of working capital can also attract women who are housewives at present (and therefore outside the labour force), and who can productively employ a few hours every day to earn additional income for their families.
VISION, MISSION AND GOALS
MBK’s vision is to provide access to working capital to significant numbers of low-income households in Indonesia, particularly in rural areas and small towns, in an honest, timely and efficient manner.
MBK’s mission is to raise the income and living standards of significant numbers of the bottom 25% of households by income in Indonesia.
MBK’s medium-term goal is to reach one million clients by 2012-13.
An important MBK objective is to learn best practices from leading MFIs around Asia, adapt them to Indonesia, and actively disseminate these best practices to Indonesian-based MFIs through site visits and sharing of operational manuals and procedures.
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