Frequently Asked Questions about Bamboo Micro Credit
Who is Bamboo Micro credit?
It’s probably better to ask what is Bamboo Micro Credit? Originally (back in 2007) Bamboo Micro Credit was started by Peter Johnston, when he realised that by giving a small loan to an Indonesian who was struggling to make a living, he was able to make a genuine change in someone’s life. It didn’t cost much to start off, and because the money was an interest-free loan, the person being helped was able to pay back the loan in a manner that suited his capabilities, without the burden of interest compounding against his efforts to get ahead. Today Bamboo MC is an incorporated Not For Profit body. It has a Board of Directors, two Yayasans in Bandung and Malang to oversee the loans, and a growing number of Australians who want to see Indonesians who are in poverty get a a chance to improve their lives.
What is a Yayasan?
A Yayasan is an Indonesian NGO with a specific purpose. (The ones Bamboo MC uses are specifically designed to help us administer interest free loans to Indonesians in genuine need.) Yayasans are trustworthy groups that are recognised by the Indonesian Government as legitimate organisations for the purposes of operating in Indonesia. Instead of donated money going to organisations and paying expensive salaries to administration staff, Yayasans operate at the ground level with very small costs. That means that almost every dollar donated to Bamboo Micro credit gets to where it will do the most good, helping those in poverty. Yayasans operate within their community. They are respected people who share the desire to help those in need.
How can I help?
There are three ways to help. Bamboo are always looking for helpers. If you would like to be a volunteer at one of our Perth events, contact the events team firstname.lastname@example.org or call 0431 039 909. Of course we survive on donations, so if you are up for the cause you can donate to Bamboo. See the donation button on the home page. Being a part of something special like Bamboo Micro credit can be rewarding. If you would like to join as a member, look for the membership login on the home page or click on membership.
How does micro credit work?
Micro Credit is a system of lending that aims to help people in poverty. The amounts are small – say the equivalent of $500 AUD, but the impact that they make to those with nothing is remarkable. People who take a Bamboo micro credit loan get it as an interest free loan. They commit to paying back the money based upon their personal circumstances. You may have heard of the Grameen Bank and the work of Muhammad Yunus, who won the Nobel prize for Economics. His micro lending started in Bangladesh with an investment of $27USD. The Grameen Bank now has revenues of over $120 Million dollars. Like Bamboo Micro credit, the idea was and still is, to provide interest free loans to those in the greatest need.
Why should we donate money to Indonesia?
People ask this question a lot. You will have heard the saying “charity begins at home”, and so it should. Looking after our own families is an important responsibility. For some of us, we can go further. The opportunity to give a bit more, means that we can look at donating our time and our money to outside causes where we can make a big difference. Poverty in Indonesia takes place on a size and scale that is beyond most people’s understanding. Unlike Australia, Indonesia doesn’t have a system of social welfare. If you don’t have a job, you don’t have any money, and there is not welfare handouts or unemployment benefits… and in a country with over 250 Million people, jobs can be hard to find. The no-interest loans that go to Indonesians in need are game changers. They allow people to change their lives so that they have the chance to get ahead, giving hope and confidence, in uncertain circumstances. Indonesia is our closest neighbour. For Australians, the need to help our neighbours has never been greater. Bamboo micro credit has a range of beneficial outcomes beyond simply helping those in poverty. The investments that we make go a long way to building cross-cultural understanding, cooperative interactions, and promote peace and prosperity at the ground level.
What is the Multiplier Effect?
Once you donate to Bamboo micro credit, your money keeps working over and over. Let’s say you donate $50. That money becomes a no–interest loan for someone in poverty. They might pay it back over time (say 2 years). Then Bamboo uses your donation again for a different person to fund their no-interest loan. The multiplier effect is where the money is used over and over to help multiple needs.
How safe are the loans?
The amazing thing about micro credit is that over 95% of Bamboo clients repay their loans in full. People in poverty will cherish the opportunity given to them. They don’t get many chances, and the fact that the interest free loans are repaid at such a high level shows that they are well worth the risk. Did you know?… Bamboo micro credit has a better repayment success percentage than the credit card loan portfolios of most Australian banks!
Why don’t Indonesians get a loan from a bank?
It’s easy enough in Australia to go to a bank and ask for a small loan. But in Indonesia, for someone who lives in poverty, it is unbelievably difficult. With no formal documentation, no business records, no taxation history, and almost no collateral, Indonesians in poverty don’t have access to loans through a bank. If they do, then they are under strict repayment schedules, compounding interest rates, and a variety of conditions that seem insurmountable. There are some private operators who do offer loans for small amounts – but many of these operate like “loan sharks” preying on poor people’s vulnerabilities, and often racking up much worse debt through high interest rates and fees. Some people in poverty can’t read or write very well. They might not understand a contract, and they are very easy to take advantage of. In the worst cases, loan sharks offer small loans that quickly grow to unmanageable amounts that place terrible burdens on the poor. The repayments sometimes turn into extreme circumstances of servitude, slavery and prostitution.
Bamboo Micro credit offers its loans without interest to ensure that those in poverty don’t get caught in a debt spiral. We seek out those in need, especially the ones that can’t get money from a regular bank.Once people start to climb out of the grip of poverty, they begin to accumulate the means by which they can access money and assistance through regular channels. Bamboo micro credit not only lends money to the poor, it also teaches people important life skills that will enable them to manage small amounts of money in a sustainable meaningful way.