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Two Steps Forward … One Step Back

The nature of micro finance is that each borrower is fragile. They often lack the financial stability to change their circumstances for the better. The aim of micro borrowing is establish the additional help to make a change. The amounts are deliberately small so that individuals and fragile small families can introduce a transformation that will generate a better financial, social, or health outcome.
In the context of creating upwards change, the use of micro-loans seems well placed, sufficiently gentle, and effectively attainable. However, sometimes there are bigger forces at play. Acts and fluctuations that can emerge that are beyond the control of anyone, let alone those who survive close to the poverty line.
In Indonesia the poorest of folk can often demonstrate their resolve and their tenacity in the face of overwhelming difficulties. In May 2016, one of Malang’s best known market places suffered a large fire. Known as the Pasar Besar, this market was a ‘must see’ market for both locals and visitors to the city of Malang. It included an enormous range of pop up stalls, food and drink, goods for sale, and services aimed at the repair and mending all manner of items. The impact of the fire was unkind to some, and fairer to others. More than a dozen of Bamboo’s micro borrowers were affected. The fire tore through large parts of the upper levels of the multi-storey market block. Stallholders on the outside and at the fringes were spared from too much damage. Those in the inner parts were dealt the unkindness of total destruction.
For some it meant that their location in the market was gone, and that they needed to find a new place to sell their snack foods, or their drinks, or their magazines. For others, their opportunity was turned upside down. Micro-lending is commonly used to provide money to buy stock. In the case of the fire at the Pasar Besar, several Bamboo borrowers lost their entire business venture. No stall, no customers, and nothing the sell.
For those of us in developed economies, there are safety nets, payouts, insurance claims, and a range of services designed to get us back on our feet. In Indonesia, most of that protection simply does not exist. Without unemployment benefits, some small business owners are worse off than before. Without the stock or the customers to sell to, they are left with no money, little prospect, and they are stuck with a financial debt. In the business of lending, no bank ever wants to talk about writing off a debt. However, sometimes the best type of debt is the one that is forgiven. Taking risks (albeit calculated ones) means accepted the challenge of poverty alleviation. For Bamboo Micro Credit, the distinction between micro-lending and charity is an important one. Giving money to poor people is not helpful when compared to providing funds that enable a family to help themselves. An interest free loan can make all the difference to a family trying to lift itself out of subsistence. Such loans are not designed to create millionaires, but they are intended to provide opportunity in the face of greed and discrimination.
Even those businesses that start and fail are known to generate valuable experiences. The lessons learned, the knowledge gained, and the practice of endeavouring to make a change, are all useful elements in the journey to alleviating poverty. Micro-lending groups such as Bamboo Micro Credit offer small scale, interest free loans specifically to help lift people out of poverty and to make them seek out their own self-sufficiencies. It’s not always perfect, and the path to greater strength and stability is sometimes cruel and inconsistent. Two steps forward … one step back.

Photo of fire at Pasar Besar
May 2016 Fire at the Pasar Besar market in Malang East Java

Bamboo Micro Credit:
It’s not a handout … It’s a hand up

David Cook is a Director of Bamboo Micro Credit.
Pasar BesarPasar Besar

Living in the half light

If there is one thing that well-off people take for granted, it has to be the ability the see clearly. In Indonesia that visibility is challenged, overwhelmed, and mercilessly beaten.  For some the prospect of working in low levels of darkness is simply an everyday challenge.  Electricity is not well distributed in farms and villages. Many people work in their fields and paddies under the shadow of night.

There are dangers to working in low light, or half-light. There are holes to fall down, potholes in roads, and many uneven pathways and roads that have been carved into the landscape, neither flat nor firm, but instead representative of something more akin to an obstacle course.

For those in need of more income, working through the night can give the chance to earn a tiny bit more money. For some it is the means to buy food, whilst for many it just means being able to exist. In rural areas and in villages, there are few who can afford prescription glasses. It is estimated that more than a quarter of all Indonesians are in need of glasses to see clearly.

Spare a thought then for those who live in no light at all. In Indonesia there are more than 3.5 million blind people.  What opportunities are available for the blind and the acutely vision-impaired?  Orang Buta can be found everywhere. If they are lucky enough they can be helped by their family. Led by the hands of children, and allowed to sleep under a roof at night, and under shelter from the rain.

However, many blind Indonesians live alone or segregated in groups of blind people.  Families know the risk of caring for the blind. Another mouth to feed, another sick soul to care for. Where poverty is at its cruellest, one can always find the blind.  Empathy stands aside, and the blind are separated, segregated, and seen as a burden to the rest of society. Only those young blind folk from wealthy families get to attend school. The rest are often left to fend for themselves. Many do not survive.

Micro finance is often directed at the able bodied people, or at least to those with the clearer prospect of starting a small venture, and obtaining some small measure of independence and financial resilience. Microcredit often falls short of helping those in poverty but who cannot see.  The value of no-interest micro finance is that it can be channelled in any direction. It does not seek to favour the healthy, but rather it is purpose built to lift up those in need.

Some of the best micro finance programs have helped the blind in projects such as weaving, vegetable growing, and mushroom farms. For many it is the chance to use their hands and to add value to raw materials and basic produce. In Jakarta there are blind people in print shops, in Balikpapan there are blind fishermen, and in the hills of Malang there are blind people turning apples into Dodol (apple toffee). Micro finance finds opportunities in the strangest places.

Bamboo Micro Credit.

Its not a handout … it’s a hand up.

About the Author

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David Cook is an Indonesianist, a technologist and an academic interested in poverty, social justice, CSR and Human Computer Interaction. He is a Director of Bamboo Micro Credit.strangest placesstrangest places

Building micro business layers to rise above poverty and debt

The resilience of low income Indonesians and their ability to scratch out a living from very meagre resources never ceases to amaze economists and financial observers. Yet for many the resultant lifestyle is one that remains trapped in abject poverty. For those in rural parts of Indonesia the choices for work are often limited to a handful of options. Growing rice or some other crop is common, but requires land. Raising livestock can use less land, but requires animal skills and involves constantly checking to make sure that the livestock are in good health. In almost all examples, there is a genuine need to find extra work options by layering additional structures alongside the existing work.

Such is the case of Ayesha from a village in the area of Subang north of Bandung. Whilst her husband looks after half a dozen cows in a very small dairy, Ayesha leverages the supply of milk from their micro-dairy to allow her to develop a ginger flavoured, powdered milk drink called “Suhe” (pronounced Soo-hay). The drink is delicious and comes in sachet form for easy distribution, and for marketing appeal to young children. To produce her new product, Ayesha relies on milk from the dairy, and a set of kitchen utensils that she uses to turn the leftover dairy product into powdered milk.

The advantage for a husband and wife team whose primary product is wholesale milk, is that Ayesha’s additional powdered drink venture also provides much-needed income to help support their needs when demand and supply of milk is volatile. Before creating powdered milk drink products, Ayesha’s and her husband were very vulnerable to the ups and downs of a small dairy. If one cow got sick, the added strain onto the other 5 cows was difficult. In short, the extra income from Suhe can provide stability for a young couple, and at the same time provides a pathway for the family to rise above the trap of financial insecurity.


Located at the foot of the Tangkuban Perahu volcano, Ayesha’s and her husband are keen to expand into new enterprises that can help the long-term practicability for Ayesha and her family. Yet many Indonesians make the mistake of placing all their eggs into the one basket. Previously Ayesha and her husband simply kept cows in the dairy, where the risk of disease and misfortune had a regular likelihood of occurring. Such a dependence had high level consequences since the production of milk had become their sole source of income. In 2016 Ayesha and her family have greater security, and better prospects. Her Suhe ginger milk product is gaining acceptance in the north of Bandung, and there are plans to offer additional flavour options in the future.

There is an important lesson for struggling Indonesians who work in informal and variable situations trying to make a living of one sort or another. Indonesians can become trapped into impossible situations where debts can spiral out of control and where the man of the house cannot feed his family because there is not enough money to distribute. For many, the idea of working with livestock and crops means subsisting from day to day, and hoping for something to change. There are many Indonesians who find it impossible to rise out of poverty. Some become trapped in debt, and are unable to earn additional income. They become trapped in a cycle of lowly paid work, and find themselves unable to break free from their circumstances.

One of the most effective methods of breaking the cycle of poverty is to show agility and flexibility in adapting to new opportunities and new systems, and to encourage folk to broaden their horizons. This is where micro-finance organisations like the Australian NGO Bamboo Micro Credit provide highly advantageous opportunities to assist Indonesians to rise out of poverty. For those who live in poverty, micro loans might sound like risky business. But the risk is not so much about a loan default, as it is about preventing the collapse of the family unit, and providing an interest-free, debt-reducing option to help Indonesians to break free of the financial grip of poverty. Bamboo Micro Credit provides micro-finance 365 days of the year. They operate in both Sumatra and Java, and are looking to carefully expand their services through other parts of the Indonesian Archipelago.

Bamboo Micro Credit. It’s not a hand out… it’s a hand up.

About the Author

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David Cook is an Indonesianist, a technologist and an academic interested in poverty, social justice, CSR and Human Computer Interaction. He is a Director of Bamboo Micro Credit.

The Generational Cycle of Poverty

The Generational Cycle of Poverty

For many Indonesians poverty is an endless cycle.  One of the devastating elements of poverty is that it is cyclical, and that many families endure cycle after cycle of financial shortfall. Those shortfalls have a lasting impact on families. When children get sick, families will do whatever they have to in order to get their loved ones to recover and become well. If a family doesn’t have cash reserves, they make financial decisions that often take years to recover from.  For those in jobs where there are minimal wages, the ability to recover is impossible.

The value of no-interest loans in the above equation is a very powerful thing. Firstly, it goes to directly help those people in financial mire, the very people who have no reserves, no back-ups, and no collateral to convince a traditional money lender to give them a loan. Secondly, micro lenders (such as Bamboo Micro Credit) offer their loans on an interest-free basis, making sure that the successful repayment of the loan is made without the vacuum-like effect of traditional loans where the interest accumulates in such a way that the financial struggle can be simply too hard a task for many people. Thirdly, a Bamboo loan has flexibility built into the life of the repayment. That means that in times of hardship, (especially when a family member becomes sick or weakened), the loan does not fall into a spiral of debt.

The power of these micro-loans is remarkable. The Indonesian person repaying usually succeeds in paying back all the money1. That has the flow-on effect of re-establishing a financial foundation for each person, along with their family and community of friends and colleagues. Small businesses are delicate at the best of times. An interest free micro loan gives stability in times of crisis, and it offers elasticity in times where finances and resources are already stretched to their limits.

The proof is in the results. The most fruitful ventures evolve where the flow-on effects of a micro-loan not only stabilise a living, they also give sufficient prosperity for Indonesians to safeguard their lives so that their children can be healthier, and experience the benefits of an education that their parents were unable to access.

The power of a micro-loan is amplified when the beneficiary not only profits in a small business enterprise, but he is also able to make provision for his family his children, and the next generation of his community.  Climbing out of poverty is (for some) a brief experience, followed by years of obstruction where they fall back into poverty. More than 68 million Indonesians are at risk of falling back into poverty2. Climbing of poverty is a truly wonderful achievement for some. Using that achievement to break the generational cycle of poverty is where the power of micro lending shows up as the single most effective non-government treatment for the reduction of poverty.

  1. More than 95% of loans taken out through Bamboo Micro Credit are repaid in full.
  2. According to the World Bank 68 million Indonesians are at risk of falling into poverty in 2015 and 2016.

Bamboo Micro Credit … it’s not a handout, it’s a hand up.

About the Author

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David Cook 

David Cook is an Indonesianist, a technologist and an academic interested in poverty, social justice, CSR and Human Computer Interaction. He is a Director of Bamboo Micro Credit.

Living Below the Poverty Line

Many people ask why I remain so interested in the good fortune of Indonesia. Some people even say that I’m obsessed with it.  Few people, however, get to see hard core poverty face to face. We can all say that we are aware of the problem, but few of us engage directly with a family living in poverty. There is a sense of scale that doesn’t quite translate when we simply read about the problem of poverty. Living in Australia, there are of course people living in poverty, and they have great needs. To some extent, the needs of indigenous Australians living in the remote parts of Australia are of such severity that it would relatively easy to look to Australia’s indigenous problem before taking the time to glance over the ocean at our nearest neighbour and see poverty in Indonesia.

For my part, the challenge is not to take an “either / or” view – but rather that we need to address both Australia’s poverty and Indonesia’s at the same time.  Perhaps in that sense – the idea that poverty occurs in Indonesia on a grander scale is a tough thing to grapple with.  In 2015, there are over 30 million Indonesians living on less than $28 a month. They work for less than a dollar a day. In countries like Australia of course, our poorest people are eligible for a range of social welfare assistance, from unemployment benefits, to travel concessions, to free health care in modern public hospitals.

However, the story in Indonesia is far from similar. The people living as Indonesia’s 30 million poorest folk have nothing like the Australian social welfare safety net to help them out. Indonesians living in poverty can survive on a dollar day. They can survive, that is, until they get sick, or until a family member dies. They can survive by working in dangerous and toxic conditions, exposing themselves to health risks that take their toll over the course of a worker’s life. They can survive by living away from their families, their children, and their communities.

The need to lift people out of poverty therefore, is so much more than passing on donations. Repairing poverty is about finding sustainable opportunities for Indonesians so that they can build up a business, or open a small shop, or make something to sell that will give them more than just the food they need to survive. True poverty healing goes beyond the giving of money. It requires finding ways and means for people to explore their own business visions and giving them enough assistance to start their better developed journeys. Will there be some that falter and fail? Undoubtedly. But the value of an interest free micro loan from Bamboo is not a guarantee of a calculated handout to the next level, it is the empowerment of individuals and their families to build themselves a better future with dignity and passion.

Bamboo Micro Credit.    Its not a hand out… it’s a hand up.



About the Author.

David Cook

David Cook is an Indonesianist, a technologist and an academic interested in poverty, social justice, CSR and Human Computer Interaction. He is a Director of Bamboo Micro Credit.

A reminder of how far Bamboo Micro Credit has come.

The story of how Bamboo Micro Credit came to be reminds us of an important message in understanding why we should look to change the lives of others even from the smallest of beginnings

Bamboo was conceived from an idea by Peter Johnston in 2007. He had visited Indonesia regularly since 2004 and realized that there were many poor people there who had minimal income and that there was an absence of State funded financial support systems for people without income. He also noted, however, that many successfully operated small businesses. He became aware that finance for these businesses was difficult to access for the majority, unless they had significant assets. Banks were not interested in lending to poor people, who often resorted to seeking funds from illegal money lenders, who charged extortionate rates of interest. It was clear that relatively small amounts of money could make a significant difference to peoples’ lives.

Peter had many years of experience as a social worker and community facilitator and felt he could use his experience to develop a program to provide affordable loans to poor people in Indonesia. Indonesia is Australia’s nearest neighbour and while the island of Bali is well known to Australians as a tourist destination, the majority of the remainder of the country, its population of almost 250 million, its culture and religions are little known. It is a newly emerging democracy, with a growing economy, but it is still a developing country, with poorly developed Government support services for its population. Unemployment and under-employment are chronic features of the economy and it is estimated that approximately 20% of employable Indonesians are without full time jobs.

During a visit to West Sumatra in 2007, Peter met a local tour guide in Bukittinggi and respected community worker, Fikar, and between them, they agreed to put into place a trial program of micro credit to a small group of local people. Using funds initially donated by Peter, this trial proved extremely successful and Bamboo Micro Credit came into being. The name Bamboo was selected because of the ubiquitous nature of the wood and its remarkable flexibility reflecting the nature of the organization.

In 2008, another branch was established in Bandung West Java with the help of a local volunteer. This was discontinued in 2010, but in 2012 a partnership was developed with PESAT, an NGO established in 1993 which installs clean water and sanitation in villages around Bandung. This partnership, which expanded PESAT’s existing small micro credit operation, is funded by Bamboo and greatly increases the opportunities for Bamboo to offer loans to potential borrowers in rural communities.

A new partnership with Daya Pertiwi Foundation was more recently signed and Bamboo added a third location in Indonesia. Daya Pertiwi has extensive experience in managing micro finance and Bamboo funds are now targeted towards loans for the poorest people in Malang in East Java.

Whilst other possible partnerships are continually being explored, Bamboo continues to make new connections and form new relationships as the micro-lending organisation takes root as an organisation that makes a difference in the lives of some of Indonesia’s poorest people.

Bamboo Micro Credit – It’s not a handout. It’s a hand up.

About the Author.

David Cook

David Cook is an Indonesianist, a technologist and an academic interested in poverty, social justice, CSR and Human Computer Interaction. He is a Director of Bamboo Micro Credit.