Bamboo Micro Credit Inc is an organisation formed to help very poor people who live in Indonesia. The organisation has its home in Perth, but has members from far and wide who have joined to be a part of the movement to help those in poverty to lift themselves out of the difficult cycle of financial hardship, impoverishment, and marginalisation.
One Man’s Vision
Bamboo was conceived from an idea by founding director Peter Johnston in 2007. Peter had visited Indonesia regularly since 2004, and soon realised that there were many poor people in Indonesia who had a limited number of options and minimal income. He noted that there was an absence of State-funded financial support systems for people without regular income. At the same time, it became clear that many Indonesians successfully operated small businesses. It became apparent that finance, and access to small amounts of money, was a key element that distinguished those who got business up and running, and those who lived in the shadow of poverty. People with irregular income, or who had informal cash systems often lived in a very “hand to mouth” existence. On the other hand, banks and other lenders wanted to see regular income, collateral, and financial systems that helped to track the flow of money. For many poor Indonesians, the prospect of even a small loan, can seem insurmountable.
Bamboo seeks out suitable people to loan small amounts of money, so that they can improve an existing business, or start a new venture. The key criteria is that their venture aims to help to lift an Indonesian and their family out of poverty. Bamboo offers interest free loans. This is done for two reasons. The first is that business ventures at this end of the market are very fragile. It is Bamboo’s philosophy that we do not wish to draw people into the spiral of debt that can often hurt people with compounding interest. Such situations create despair where those in need become bogged in the grip of never-ending payments. The second, is that Bamboo wants to show a clear difference between itself and the many micro-lending loan sharks who offer small loans with high interest payments. Exploitation and extortion of the poor is an all too common occurrence in Indonesia.
Bamboo offers its loans with flexible repayment schedules, with no interest. We encourage our customers to make the most of their opportunity, and to pay back their money as a result of their improved circumstance, not as requirement to service growing debt. With that said, Bamboo has a remarkable record of success in the repayment of its loans. 95% of its loans get paid in full, (compared to the much lower statistics for most major banking enterprises in both Indonesia and Australia).
Bamboo Micro Credit operates from a base in Perth. It has a Board of Directors who meet regularly. Bamboo has a loan portfolio which currently offers micro credit through two Yayasans (Indonesian NGOs). One is located in Bandung in West Java, and the other is located in Malang in East Java. Money from donations is transferred to one of the Yayasans, who operate within their locations to offer micro loans to people in need. The operations are regularly audited and donated money is reconciled against a vibrant and growing loan portfolio.
A Business Need
Bamboo micro loans are usually for a business purpose. They range in size, but amounts of Rp3,000,000 to Rp5,000,000 are common loan sums. The loans are not for personal or home use. Instead, Bamboo loans are offered so that people can start a new business, or make a notable improvement to an existing one. The range of loan usage is wide and varied, but the most important thing is that the receiver gets a chance to change their life and the lives of those around them.
The choice of the name Bamboo has great meaning in Indonesia. In one sense it represents those things that are sturdy and resilient. Bamboo is favoured for its structural strength and durability. In another sense, bamboo is also known for its flexibility and elasticity. Thus Bamboo Micro Credit works hard to deliver interest free loans that offer strength, yet also have enough flexibility to meet the needs of different individuals
Today Bamboo Micro Credit has a loan portfolio that gives hope to hundreds of Indonesians. In eight short years Bamboo Micro Credit has achieved remarkable results within the Indonesian Archipelago. The repaid loans are fed back into the portfolio reserves, meaning the money donated to Bamboo gets used over and over again, from one business need to another. The future will see Bamboo Micro Credit offer its services beyond its current establishments. New Yayasans are being set up, partnered, and re-structured to extend the Bamboo business model to more Indonesians. The strategic plan for the next few years will see Bamboo partner with locals in new towns and cities, helping Indonesians to climb out of poverty.
BAMBOO Micro Credit – It’s not a Handout … it’s a Hand Up.