16.10.17 | News

Microfinance – A Strong Tool of Empowerment

In an interview, Katarina Tombi and Elisabeth Dakka Mapandin from Toraja, Indonesia, explain the successful microfinance work of their church
Elisabeth Dakka Mapandin (left) and Katarina Tombi.

Women in finance: Elisabeth Dakka Mapandin (left) and Katarina Tombi know their numbers (Photo: EMS/Waltz)

At the beginning of October, the EMS Microfinance Conference with its nine Indonesian member churches took place on Bali. Elisabeth Dakka Mapandin, Chairperson of the Syalom Cooperasi, and Katarina Tombi, Treasurer of the Toraja Church, attended the conference. In Toraja, they work with microfinance for over 30 years. In 1983, 13 women of the Women Fellowship of the Toraja Church started a microfinance cooperation. They discovered that the members of their church needed the possibility of getting small loans for expenses of all sorts as getting a loan from a normal bank was really difficult. Since 1997, the cooperation has a legal status. Since then, also men can become a member.

What made you start this cooperation?

Elisabeth: We wanted to empower the people in the villages. So we discussed possibilities to help our church members in need of financial means. We started with small amounts of money and handed out loans of about 1,000 Indonesian Rupiah (IDR). Today, this would equal about 1,000,000 IDR. For the start, the 13 women who initiated the project all put some money in the cooperation. Which made it possible to hand out the first loan. Today, you have to put one fifth of your savings into the cooperation when you want to get a loan.

What are the main needs of finance?

Elisabeth: The main reasons why people need a microcredit are health issues, education fees, starting capital for small businesses like pig breeding but also renovations or house buildings.

Katarina: Because of our faith, the Toraja Church wants to cut the poverty line by giving education to their members and children. In order to give education to their children the parents need money for school fees, school materials and others. They hope that with a better education the children will have a better future.

How is the process of getting a microcredit?

Elisabeth: To get a microcredit you have to be a member of our cooperation. In order to become a member you need a recommendation from the pastor of your congregation as well as recommendations from three people who belong to our cooperation already.

You have to fill out an application that is signed by two parties for example husband and wife or employer and employee. In the application you have to state what amount of money you want to loan and how much you are willing to pay back per month.

The maximum amount of money we hand out is 100 million Indonesian Rupiah. And the maximum duration of a microcredit is three years.

What did you learn at the microfinance conference in Bali that you can use within your cooperation?

Elisabeth: I learnt new criteria that help to find out if people are trustworthy. I also learnt that we need to help others. But not in a social way. Microfinance is a business and we need to educate our members how to manage their financial loans. So we need to train them in capacity building.

Can you give us a success story of how the cooperation helped?

Katarina: I might be called a success story. I started with a loan 20 years ago because it was very difficult for me to get a loan from the commercial bank. I borrowed 3 million IDR to rent an own house. After 1.5 years I had paid it off. Over the years I got more loans and today I am lending 100 million IDR for my own micro business. I don't think I would have come that far without the cooperation.

The interview was conducted by Elisa Heiligers.