By Jerry Harter, KF13 Indonesia
Riding on the back of Zeruya’s motor bike, I was on my way to visit the Taman Indah Group about 20 miles from the microfinance office, Koperasi Mitra Usaha Kecil (MUK). After weaving through a chaotic maze of trucks, cycles, and cars, I was relieved to leave the main highway and turn down a quiet lane of paddy fields and cucumber farms. Zeruya, my Kiva contact with MUK, wished his tires had less air to better handle the potholes – and my additional weight. Ultimately we turned into a driveway where many of the group had already gathered. I was impressed that Zeruya found this out-of-the-way place without a map or road signs.
The Taman Indah Group and representatives from MUK were here to process the repayment of the group’s first Kiva loan. Earlier in the year, the group was created by its ten members. They called themselves Taman Indah Group, literally the ‘Beautiful Garden Group.’ They had a couple of things in common. They were all interested in creating some additional income from pig farming and, more importantly, they trusted each other. They knew when they formed the group that they would individually and collectively be responsible for repayment. Obtaining future loans and larger loans would hinge on the repayment. Typical for pig farming groups (and similarly with many agricultural loans), the loan is disbursed to purchase the piglets and then, after the sale of the pigs, the total amount is repaid with a single payment. For Taman Indah, the loan term was six months.
When I arrived, most of the group members and representatives from MUK were already there. For repayments, especially for group loans, MUK will send at least the loan officer and a supervisor to assure quality control. This time, Zeruya and I were also present. A couple of the group members were still working and would meet with the loan officer later. A covered platform was used as an outdoor office for MUK and a second platform was set up nearby for the group members. Agus, the loan officer, explained the repayment process and then one-by-one group members approached the ‘office’ and made their $145 repayment. Agus and Herman, the supervisor, counted and re-counted the payment. An account entry was made by Agus and then signed by the group member. Ultimately, all members had fully repaid.
And so, the Taman Indah Group successfully raised and sold all the pigs they purchased with their Kiva loans. Each member of the group was able to raise 3 to 4 pigs and make a net profit of about $10 per pig. Most members of the group used this extra family income for savings and to pay for their children’s schooling. After the sale of the pigs, the group fully repaid the loan. Now, because of the success of their first Kiva loan, the group looks forward to a second loan. Koperasi Mitra Usaha Kecil (MUK) is happy with this success and plans to provide them with a higher loan amount next time.
I was left with a question: Would I be willing to raise a pig for six months for a $10 profit? It was definitely worth it for members of this group, and for them, it was one small step away from poverty.