Small Business Start-up

Hers is the face of poverty, for poverty leaves its mark. At just 34 years of age, Maria, a mother of nine has suffered more than her share of setbacks.

Maria's tragic tale is commonplace in Punagaya, a picturesque seaside village of houses on stilts near Jenoponto, South Sulawesi, Indonesia. Many of the 700 families who live in Punagaya are desperately poor and have been all their lives.

Undaunted, Maria still looks with hope to the future. As she explains, she has always nursed an ambition to do better and even has a strategy - setting herself up to sell fish.

But even such a modest undertaking needs some start-up capital. Until recently, the only way for the people of Punagaya to get a loan was through rentenir (moneylenders).

These ruthless loan sharks are brutal and uncompromising in the way they prey on their victims. Charging 20 per cent a month - that compounds annually to more than 300 per cent - the rentenir rely on people's inability to repay their loans.

The first time Maria got a small loan from the rentenir was in 1988. Since then, she has been forced on three separate occasions to surrender all her possessions - including her house - in order to settle outstanding 'debts'.

'The first time they came, they sawed through the stilts and took the house away on a truck,' she said.

Maria's plight is not unusual. Loan sharking is common among the poorest villages in the Jenoponto area, simply because there is no other form of credit available.

'The trauma of dealing with the rentenir has made so many lives miserable,' says Rajmad, a social worker with an Indonesian NGO based in Ujang Pandang, the provincial capital.

Rajmad and his colleagues are being supported by AusAID's Australian Community Development and Civil Society Strengthening Scheme (ACCESS) in their efforts to guide and encourage the residents of Punagaya to develop strategies for a sustainable future.

Ramjad's NGO targeted the poorest in Punagaya and made sure the village's women were actively involved in devising and implementing a community plan of action. After much discussion, it was decided that family-based activities such as fishing and seaweed farming could be developed to generate incomes - but only if financed on reasonable terms, not by the hated rentenir.

On this basis, ACCESS accepted a joint proposal by the NGO and the villagers to set up a micro-credit scheme for families, one that will gradually develop into a community bank. The scheme provides loans at reasonable rates to households for the purposes of income generation.

'Providing an alternative to the rentenir gives this community a chance to build a sustainable future,' maintains Rajmad. 'Access to credit funds for equipment will mean big increases of incomes in a relatively short time.'

In Maria's case, however, the shackles of poverty will not come off so easily.

Eighteen months ago - it was her fourth attempt to set up the fish selling business - she obtained a 300,000 Rupiah loan that has since blown out to more than two million Rupiah. It will be only a matter of time before the rentenir will want their due.

But, after that, this time with the support of her community, Maria might finally get an even break.

Photo: Jack Picone

2004