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By Lira Rewiantari

“Bank Andara is unique in the world as a pro poor wholesale bank and is aiming to change the way microfinance works in Indonesia,” says Don Johnston, Business Development Director of Bank Andara. “By offering a ‘one stop’ commercial partnership with small independent microfinance institutions (MFIs) we enable them to access financing, technology and MIS support so that they in turn can provide their customers with vital services and products that typically only commercial banks can provide, ultimately helping their customers build their livelihoods and reduce the risk of poverty.”

 

Understanding the critical needs of MFIs and their customers in the Indonesian microfinance sector, Bank Andara was founded in April 2009 by a consortium of socially motivated and financially experienced shareholders, including the International Finance Corporation (IFC) and Mr. I Wayan Gatha. The Bank was created to bridge a gap in the market between the formal and informal financial sectors and work as a strategic business partner to Indonesian MFIs, to deliver its social mission of helping millions of unbanked low income Indonesians access financial services and products through small local MFIs.

 

Through partnership with Bank Andara, MFIs can extend their reach to the poorest members of Indonesian society and provide locally accessible, needs driven services across the archipelago, from large urban slums to small rural fishing villages, while also expanding and building their businesses and outreach more effectively. One such MFI client is BPR Karangampel, established 36 years ago in Indramayu with a strong “pro poor” focus.

 

BPR Karangampel supports micro and small enterprise customers working in a diverse range of businesses: 48% in trade, 22% in farming and fishing, 25% in business and 5% in transportation and industrial services. Like many other “pro poor” MFI clients of Bank Andara, BPR Karangampel focuses on supporting customers who have difficulty accessing loans and financial services, and in doing so shares Bank Andara’s vision to progressively and steadily helping those low income Indonesians most in need to develop their livelihoods, build up their wealth and to avoid the risk of dropping back into poverty for good.

 

Mr Tofik is one of BPR Karangampel’s customers and came to the BPR looking for business support to make a sufficient and consistent living. Before Mr. Tofik became a client of BPR Karangampel, he earned a living by collecting recycled waste and re-selling it, but like many others, his business was devastated when the price of recycled waste dropped dramatically. After this he decided to look for a safer profession and chose to become a beekeeper. “The idea came when I visited my friends in Jatibarang and saw my friend’s neighbours harvesting honey and I realized it could be a reliable and sustainable business for me too,” Mr Tofik explained. Subsequently Mr Tofik approached BPR Karangampel with the idea for his new business and they supported him with a Rp 5.000.000,-seasonal group loan.

 

BPR Karangampel’s group loan facility provided Mr. Tofik with the funds to support the start up and operational costs of his business. In the beginning he started with 3 bee boxes and collected and sold the honey door to door himself. Over the first 6 months he increased his business to 18 bee boxes and employed three additional workers to help work with the bees and sell the honey. With 18 boxes and three workers, Pak Tofik can make Rp 240.000 a day profit selling his honey door to door and to Karawang hospitals during the dry season. The biggest challenge with beekeeping is that it’s a seasonal business. During the dry season there are many food sources for the bees and they produce a lot of honey, however, in the rainy season there are limited food sources and it is hard to collect honey. For this reason, a seasonal loan with a flexible repayment facility is essential for customers such as Mr Tofik and his fellow beekeepers.

 

According to Mr Tofik, selling only the highest quality authentic honey has been important for his business success, He explains "Some people try to sell low quality honey but I'm selling high quality honey at a price of Rp80.000 per bottle, and I can prove the authenticity of my honey, when exposed by heat of fire, the honey will not vaporize and will become crystal when it’s cold”. He also adds “in this way I have built my reputation and client base for selling a quality product. Many customers believe that authentic honey helps increase food appetite, cure toothache, gout disease, asthma and other diseases, so quality is important for good business performance.”

 

Mr. Tofik’s new business has been lucrative during its first 6 months of business and continues to develop and provide a reliable source of income that is helping not only Mr Tofik but also his employees to develop their livelihoods and avert the risk of poverty for the long term.

 

BPR Karangampel and Bank Andara have been working together to help many low income small entrepreneur clients like Mr Tofik to build their businesses. “I hope that my business will continue to go well, so I can employ more workers and increase profits, said Mr Tofik.” Indeed, Bank Andara has made its goal to provide financial assistance to millions of unbanked low income Indonesians like Mr Tofik who with a little support, have the capacity to build their livelihoods, raise themselves out of poverty and contribute to making their communities prosperous by building persistent and financially equipped micro and small enterprises.