Through backyard jungles they traipse armed with bb guns and with dogs trailing behind. They bang large wooden hammers against coconut trees, climb up and down the trees, and position themselves to point and shoot. 14 men on a mission: to protect their village gardens from squirrels. While in some parts of the world, hunting squirrels (the adorable, furry friends from childhood cartoons) does not sound so appealing, but here in west Bali, squirrels are pests, feeding on the coconuts and cacao fruit – from which people here make a living.
But what exactly does squirrel hunting have to do with microfinance?
In Blimbingsari, a small village in west Bali, these 14 squirrel hunters belong to a microfinance self-help group of sorts. A self-help group, in microfinance, is typically a group of 10 – 20 members who make regular savings into a pooled fund, from which loans can then be made to its members. The group is self-governing, and peer pressure and collective wisdom ensure proper use of loans and on-time repayment (Wikipedia). This squirrel hunting group, however, breaks the traditional mold.
In 2006, the idea was born. 14 farmers decided squirrel hunting and microfinance should go hand-in-hand. Instead of building a pool of funds from regular savings as many self-help groups do, they decided to hunt, sell, and accumulate capital. Every Thursday afternoon, the men meet to hunt for squirrels in the gardens throughout the village. For each squirrel they kill, the owner of the garden rewards them 4 coconuts, which they can then sell, along with the dead squirrel, to a local market. In a typical afternoon, 10 squirrels are killed (which sell at 5,000 rp a piece), and 40 coconuts are earned (which sell at 1,000 – 1,500 rp a piece), leading to a grand total of ~90,000 – 110,000 rp. This is the equivalent of ~$10 – $12 USD. After the first year of hunting, the group had accumulated enough capital to begin administering loans to its members.
Loans for group members are requested and disbursed at monthly meetings. The terms on them are more favorable than some local microfinance institutions – with each loan having a 10-month term, and 1% monthly flat interest rate. These interest payments, and proceeds from hunting have allowed the group’s combined fund to grow at a fast pace. And since inception, the group has also levied a fee of 15,000 rp on members who do not show up for Thursday afternoon hunting (a high price to pay), which is also added to the fund. Each group member maintains an equal share in the group, and is able to exit (with a tidy return on his work) if he so chooses.
The benefits of the squirrel-hunting group are plentiful. Members can easily take a loan from the group, at a relatively low-interest rate. Economies of scale are achieved by working together to squirrel hunt, and sell squirrels and coconuts in the market together. And each member’s share in the group fund has continued to grow over the past four years. But perhaps, most importantly, a community is strengthened. The members have become closer friends, with a commitment to the group, and a commitment to each other. And if one member finds himself in a tough situation, emergency loans and delayed payments can be worked out.
While it is a microfinance group, the group is also a hunting club, a business venture, and a group of guys just hanging out. When I first moved to Blimbingsari two months ago, I hoped to learn a lot about microfinance from Kiva’s partner MUK, which is headquartered here. I have, however, also learned a lot from this community where microfinance is carried out in so many different ways.
Joanne Gan is enjoying living in the community-centered village of Blimbingsari, Bali as she works with Kiva’s partner, Mitra Usaha Kecil (MUK). Thanks to Pak Komang and the rest of the squirrel hunting group for making this blog possible.
To lend to other farmers in Indonesia and around the world, check out currently funding loans on Kiva.