Tag Archives: Bamboo Micro Credit

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.

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.