Bina Swadaya was originally named Yayasan Sosial Tani Membangun established in Jakarta on May 24, 1967 by Pancasila Farmers Association, intended as a legal entity and project manager of Pancasila Farmers Association (IPP). In 1969 when the agricultural magazine published Trubus, Yayasan Sosial Tani Membangun (YSTM) acted as a publisher. Furthermore, 1973 at the urging of the Government in the context of simplifying political organizations and mass organizations, the Pancasila Farmers Association, together with 14 other peasant organizations, joined the Indonesian Harmony Association, YSTM as well as publishing Trubus magazine as well as the successor of the IPP to organize training, mentoring and development of agricultural production and marketing. These activities were managed by YSTM until 1985, when the Information Minister established the Press Publisher forbidden to manage other activities outside the press release. The YSTM Board then established the Yayasan Bina Swadaya with the same stewardship as YSTM to manage other programs outside the publication of Trubus Agricultural Magazine. Later all activities are consolidated in Bina Swadaya’s control, by making each of the Limited Company entities entirely owned by Yayasan Bina Swadaya.

Based on the fact that Bina Swadaya is rooted in IPP and IPP is part of Pancasila Social Movement consisting of Labor Organization, Farmer, Fisherman, Entrepreneur and Paramedic, Bina Swadaya’s history can not be separated from the history of Pancasila Social Movement. The history of Bina Swadaya’s journey in harmony with existing political developments can be categorized into 3 Era, namely: 1. The Era of Social Movement embodied in Pancasila Farmers’ Association (1954 – 1974), 2. Era of Community Development Provider (1974 – 1999 ), and 3. The Era of Social Entrepreneurship Institution (1999 – until now).


Association of Pancasila Farmers

The first era of the Bina Swadaya journey was the Era of the Social Movement that began in 1954 when the Pancasila Workers Association was established, then the Pancasila Farmers Association (1958), followed by the Pancasila Farmers Association, the Pancasila Paramedical Association and the Pancasila Fishermen Association. The birth of these organizations is inseparable from the social-political situation after the Independence of the Republic of Indonesia in the 1950s. As a new country, Indonesia is faced with a number of severe problems, such as maintaining independence, developing and strengthening state institutions, building political system, overcoming poverty problem and underdevelopment of colonial heritage in various aspects of life. But the main agenda of the leaders and elites at that time was primarily the dissemination of the influence of political parties generally based on ideology and religion which sectarianism led to political power. This tendency is often referred to as the jargon of ‘Politics is Commander’. In order to gain wide community support, each political party established the ‘Wings Organization’, then called ‘Onderbouw Organization’ (Dutch) among Workers, Farmers, Fishermen, Entrepreneurs, Youth, Women, Cedekiawan, Budayawan, other. So the citizens divided into groups based on multi-party ideology, religion and political flow and compete for influence. The hype of political life leads to the polarization of life in society that often leads to horizontal conflicts. In the daily life of human existence is not interpreted from the total human being who has cultural dimensions, social, economic and others, but more priority political aspirations. The problem of poverty and the suffering of the little people who encourage the Founding Father to fight for political independence of this republic in order to more effectively improve their empowerment seems forgotten.

Responding to the chaotic situation of the nation at that era invited the concerns of a group of Catholic communities under the leadership of Archbishop of Semarang, Mgr. Albertus Soegijapranata, SJ initiated a social movement that directs all of its activities to respond to the real needs of poor and poor people, without being trapped in ideological struggles between political parties and their onderbouw organizations. The idea was manifested by the establishment of the Panasila Workers’ Association in 1954, which was followed by efforts to win the support of the All-Indonesia Catholic Congress (KUKSI). KUKSI, held on 27 December 1954 in Semarang, finally agreed that the Catholic Church throughout Indonesia through the dioceses encourage and assist the establishment of community organizations in the field of Labor, Agriculture, Service and others, based on the principle of Pancasila, not the Catholic principle. That is, what the Catholic Church will encourage and support is not Catholic Community Organization, which is based on Catholicism, but General Public Organization based on Pancasila basic of the Unitary State of the Republic of Indonesia. It is a Community Organization whose members and administrators may be religious, empowering and championing the interests of Workers, Farmers, Fishermen and other vulnerable groups, independent of the party polics, religions and other primordial ties. This is in fact very much in line with the principle of Solidarity and Subsidiarity, a principle emphasized by the Catholic Church’s Social Doctrine, especially in the Encyclical Mater et Magistra of Pope Johannes XXIII (May 15, 1961).

A number of organizations were born: (1) the Pancasila Labor Union (1954); (2) Association of Pancasila Farmers (1958); (3) Pancasila Paramedical Association (1959); (4) Pancasila Entrepreneur Association (1959) and; (4) Pancasila Fisherman Association (1964). Each of these organizations has individual members, boards, structures and working mechanisms. Specifically on Pancasila Farmers Association (IPP) activities include: agricultural intesification, agricultural extensification including transmigration program, education and training, processing and marketing of agricultural products and advocacy. The IPP activities are carried out with three approaches: First, the approach of mass organizations is by fighting peasants’ rights to land ownership, obtaining fairer profit sharing in production cooperation with public and private companies; second, the project management approach in collaboration with the institution and third, community participation development approach through the establishment of Joint Business Group (KUB), now referred to as Self Help Group (SHG) an independent community institution for cooperative efforts. To optimize the performance of the program, especially with regard to project management, IPP established Yayasan Sosial Tani Membangun (YSTM) on May 24, 1967 which became known as Bina Swadaya.

Institute for Socio-Economic Development

The Second Era of Bina Swadaya’s history is the era of the Socio-Economic Development Institution that lasted from 1974-1999. As noted earlier, the development of Bina Swadaya, both institutional and program, is influenced even by the political development of the Republic of Indonesia. Similarly in this Second Era was marked by the rise of the New Order Regime to the stage of power (1966-1998). When the New Order regime came to power, the government made a policy to simplify the Political Organization and Social-Social Organizations, including the Peasant Organization, a policy that prioritizes political stability for economic growth. With regard to Farmers’ Organizations, in 1973 the IPP merged into the Indonesian Harmony Farmers Association (HKTI). Thus, the approach of mass organizations, including advocacy activities, is integrated into HKTI, while the project management approach and the development of local community participation within the Self-Help Groups are managed by Yayasan Sosial Tani Membangun (YSTM) which subsequently transform into the Bina Swadaya Foundation. As the successor of the IPP, YSTM started its activities by managing two activities: First, the development of Self-Help Group (SHG) towards the empowerment of the poor and poor people’s economy. Second, the publication of TRUBUS Magazine for agricultural information which later developed into a development communication media. Starting from these two activities, various activities emerged, either because of the development of each activity as well as those that arose because of the interaction of the two in response to the needs of the community that were enabled because of the ability to take advantage of the opportunities. Further illustrations are as follows:
1) KSM facilitation is needed in many places in Indonesia, it encourages Bina Swadaya to build regional offices spread in 23 cities as shown in the picture below.

Through the regional offices, direct assistance to the community by Bina Swadaya staff was conducted to reach 3000 SHGs with members of approximately 100,000 families. To support the SHG empowerment program, a coaching training program has been established, namely the Self-Help Group Self-Help (TPKS) Training for Bina Swadaya Assistants and other NGO, Government and Private Institutions in the framework of Corporate Social Responsibility (CSR) program. Furthermore, in order to generate greater impact, in addition to direct assistance to the community, Bina Swadaya is cooperating with Government and Private Institutions and has touched approximately 1 million KSM or about 25 million families, or about 100 million people.
2) The publication of Trubus agricultural magazine initially faced many problems because so far in Indonesia there has never been an agricultural magazine publishing. The first difficulty relates to the author’s team, many authors do not understand agriculture, while many agricultural experts do not write fluently. Combining the two skills on an individual requires a lot of investment. The magazine’s target audience is simple farmers who are mostly illiterate or unusual reading, putting the need to read magazines on a low priority scale. The cost required to send magazines to readers in the villages is relatively expensive, because the place is scattered in remote areas. While advertising receipts from producers of fertilizers, seeds, agricultural tools and agricultural services and others are practically zero, since the trust of this magazine does not yet exist and also because the necessities of agricultural means at the time were channeled through the Agricultural Service in the regions, area. The difficulties encouraged Bina Swadaya to undertake business deversification. First of all by expanding the field of publishing which is not only limited to monthly magazines, but also books of agriculture, animal husbandry, fisheries, plantations, gardening, health, appropriate technology and others. Then in addition to publishing services, the community needs various trainings and consultations according to the theme of the material discussed by Trubus magazine every month. Supporting efforts were soon created in the form of printing and marketing services for magazines and books published by Bina Swadaya and partners, and opening agricultural shops.

Social Entrepreneurship

The third era of Bina Swadaya history is the era of Social Cultivation, which has been going on since 1999 until now. Referring to the history of Bina Swadaya, Social Entrepreneurship is defined as Social Development with Entrepreneurship solution. Social Development according to the UN Development Social Summit held in Copenhagen, Denmark 1996, includes poverty alleviation, productive employment and social integration. For a long time, Bina Swadaya enjoys the support of financial assistance from various International Donor Agencies for its projects. But this comfort is feared to develop into an attitude of dependence on outside help that will actually take place temporarily. This awareness emerges, develops and then becomes confidence coinciding with the view that empowerment of the poor can not be achieved within the project or program, but must be a long-term commitment. In the service process to improve the empowerment of the community, there is also a growing awareness that efforts to encourage community independence need to be done not limited to provide theory and suggestion, it is also important to give examples, in this case Bina Swadaya self-sufficiency.

The increasingly crystallizing application of consciousness that within the framework of Bina Swadaya Institution is deemed necessary to establish an economic legal entity (Limited Perseroaan / PT) as a container of activities that are increasingly of economic weight, so that not only can the program be covered but also allow surplus which can be invested in other social development programs. Thus the publication of Trubus magazine which was originally managed by Yayasan then formed a new management agency: PT Trubus Swadaya (for magazine publishing), PT Penebar Swadaya and PT. Puspa Swara (for book publishing), PT Trubus Mitra Swadaya (for the management of agricultural shops), PT Bina Swadaya Tour (for alternative tourism programs), PT Bank Perkreditan Rakyat Bina Arta Swadaya (for microfinance services) and others. In the era of Social Entrepreneurship all the operational bodies of Bina Swadaya Foundation in the form of PT-PT, in the previous era that is the era of Socio-Economic Development Institution about 50% of the operational bodies in the form of PT. PT-PT is managed by each of the professional Directors controlled by the Board of Bina Swadaya Foundation through the Program Coordinator who appointed as Commissioner in PT-PT.

The Bina Swadaya activities currently cover 7 areas:
1) Community empowerment of citizens, including training, mentoring and consultancy activities.
2) Microfinance services, through the development of Saving and Loan Cooperative Institutions and Rural Banks
3) Agribusiness development, covering the processing and marketing of agricultural products, as well as agricultural production facilities
4) Communication development, through the publication of magazines, books and event organizer various development programs.
5) Development of alternative tourism: cultural, environment and developmental exposure program (CEDEP)
6) Development of printing services to support development communication activities and others.
7) Provision of facilities for conferences, meetings, workshops and seminars.

In order to run its programs, Bina Swadaya actively builds cooperation network, both national and international. The national network of Bina Swadaya, among others are: NGO Association of Financial Institutions and Business Development Associations of Mnikro (ALTRABAKU), Forum Komunikasi Masyarakat Kehutanan Masyarakat (FORMASI) Indonesian Society of Enhancement (IKAPI), Community Empowerment Network (JKPM), Partnership Development Forum (PDF), Rural Water Supply Group (RWSG), Participation Development Foundation, Initiatives and Partnerships (YAPPIKA) and International NGO Forum for Indonesia Development (INFID).

While several international networks are: Asia – Japan Partnership Network for Poverty Reduction (Tokyo), Asian NGO Coalition for Agrarian Reform and Rural Development (Manila), Asia Pacific Rural and Agricultural Credit Association (Asia Pacific) Bangkok), the Conference of Asia Fundation and Organization (Manila), the INASIA Network (Colombo), the International Council on Social Welfare (Geneva), the International Development Finance Leaders Forum (New York), the Microcredit Summit Global Campaign (Washington), Resosurce Alliance ) and the South East Asian Committee for Advocacy (Bangkok). Oico-Credit (Amersfoort).

Philosophy, Vision, Mission and Strategy


In serving the people free themselves from poverty, Bina Swadaya residents believe that;
1) Serving others is a noble call.
2) Society is able to help itself.
3) The best results can be achieved through sincere cooperation in order to grow and develop together.
4) Social entrepreneurship is an effective vehicle in generating community empowerment.
5) The noble intentions done ethically, earnestly and consistently must have produced good results.


Become a recognized institution of pioneering and excellence in improving community empowerment and through social entrepreneurship.


1) Generating and improving the empowerment of the poor and marginalized in socio-economic aspects through facilitation: capacity building, community institutional development and access to resources
2) Influencing development policies to be more pro-poor and marginalized
3) Develop innovations whose benefits are felt primarily by the poor and marginalized
4) Develop partnerships with various parties to improve the capacity of services to the community
5) Maintain self-reliance and institutional sustainability.


1. Mission 1
a. Promote and develop self-help group (KSM), either managed directly by Bina Swadaya itself, or in cooperation with Non Governmental Organization, Government and Corporate.
b. Conducting training programs for KSM Mentoring Workers, Training on Community Development Institutions Management, developing and implementing other training programs needed to improve community empowerment.
c. Conducting consultancy activities for Government Institution, Corporate and Philanthropy both National and International in organizing community empowerment program
d. To raise cooperation between grassroots resources and service providers in the field of knowledge, skills, financing, production facilities and others to improve sustainable community empowerment.

2. Mission 2
a. Establish and maintain good relationships with political, social and economic decision-making centers.
b. Establish and maintain good relationships and develop alliances with institutions that work senergically for sustainable community empowerment.

3. Mission 3
a. Cooperate with institutions and individuals conducting research with the result of beneficial to improve the empowerment of the poor and marginalized.
b. Adopt programs or activities that have been successfully implemented by an institution or individual to increase community empowerment.
c. Developing social laboratories, demonstration plots and the like as a vehicle for learning together to generate new ideas.

4. Mission 4
a. Developing individual and institutional databases that have potential and concern about efforts to increase community empowerment.
b. Collecting “Friends of Bina Swadaya” from various parties who have concern for the empowerment of the community, and make Bina Swadaya as a vehicle to channel the thoughts, materials, non-material and personnel to increase community empowerment.

5. Mission 5
a. Bringing Bina Swadaya’s leadership pattern as a compassion, based on the ever-evolving science, with a powerful network of work, and implemented with honesty (integrity).
b. Ensure that Bina Swadaya’s institutional and program management is carried out with good corporate governance principles that are participatory, transparent and accountable.
c. In developing various partnerships, always strive for a mutually beneficial relationship pattern.

Development Education

One of Bina Swadaya’s core competencies is training for improving community empowerment. Some of the renowned training programs are: (1) Training of Self-Help Group Development (TPKS); (2) Training of NGO Development Management; (3) Participatory Rural Appraisal Training; (3) Business Joint Training of Savings and Loans; Small Entrepreneurs and; (4) Training on Household Economic Management. The TPKS training program has been conducted since 1979 and attracted many NGO partners and government agencies to attend the training. Then starting in 1985 developed training of Community Development Development (PSM) for the leaders of NGOs. Both programs are developed in accordance with Bina Swadaya’s mission to strengthen partner NGOs especially those in the region. Approximately 20 years of Bina Swadaya very intense listening to TPKS training in order to print the community companion that is very needed.

Now Bina Swadaya’s training programs are very diverse and some of the training that continues to be developed are: Management of Microfinance Institutions, Technical Business Skills / Small Industries; Various training for Disaster Risk Reduction and Disaster Management, Various Agricultural Technical Training, and so on. The number of Bina Swadaya training alumnus since 1980 reaches more than 22 thousand alumnus of training.

Meanwhile, Trubus magazine as a leading agricultural hobbyist magazine also a lot of training. Some considerable training requests include training on: Cow Pengembangi; Business and Cultivation of Sengon and Jabon; Asiri Oil; Raising of broiler and laying ducks; VCO Production Technology; Peeled Aglaonema Completely; Chicken Business Kampung Layer and Pedaging; Production of Bioethanol with Waste and Waste Material; Spur Fish Production Gurami, Patin and Tilapia; Cultivation of Chili and Peeled Red Fruit. The number of training alumnus held by Trubus Magazine is more than 13 thousand alumnus.

Communication development

On May 24, 1967 the Pancasila Farmers Association (IPP) established the Build Farmers’ Social Foundation, one of its activities is to publish the Build Farm Bulletin which in 1969 was renamed Trubus Magazine.

In its development, many readers of Trubus Magazine after reading certain articles, for example about Catfish, want to get more information by reading a book about Catfish. Because Trubus did not publish the book, the magazine manager facilitated the readers of the needs of the books, in collaboration with a number of agricultural book publishers, such as Kanisisus, Nusa Indah, Bhratara, and Yasa Guna. Then readers buy the desired book through Trubus, until it is necessary to establish a Book Service Center. In 1979 came the desire to publish his own book, and was born the first book published by Trubus Magazine, the book “Frog Farming” which quite a lot of welcome from Trubus readers and the public.

Seeing the prospect of publishing business, on December 28, 1980 was born PT. The Swadaya spreader focuses on agricultural books. Then in 1991 was born publisher of PT. Puspa Swara, which focuses on health, skills and language. Now two publishers of the Bina Swadaya group have a very diverse theme to serve the growing needs of human development. So also published books on housing, architectural, interior design, exterior design, lifestyle, religion, education, children’s books, business solutions, management, law, self-development, sports, and so forth. In addition, Trubus Magazine also publishes agricultural books that are nge-trend.

The field of Development Communication program is also interpreted as an effort of empowerment through the development of production. In cooperation with various research institutes such as LIPI (Institute of Science of Indonesia), IPB (Bogor Agricultural University) and other Research Institutions, there are research results about products that have good prospects to be developed in the community. Those products, such as herbs, are tested for feedback in the form of testimonials about the benefits and prospects of those products. If the results are positive, then compiled promotive paper in Trubus magazine, followed by writings in books that are published specifically. then those interested are invited to attend special training on the product held in production centers. In addition, several times annually held Agro Expo to introduce the product market.

Up to now three publishers owned by Bina Swadaya produce about 1,500 titles of agricultural books and about 2,500 titles of non-agricultural books. While Trubus magazine circulation ever reached the figure of 75 thousand copies per month.

Infrastructure for Community Development

Training activities require a decent place with adequate facilities. However, in the early stages, the teaching should be postponed, the urgent training program must be immediately implemented with a modest facility. At the beginning of the TPKS training program was conducted at the chicken slaughterhouses being converted into classrooms, while the participants in the accommodation by living in live in the homes of the residents around the former slaughterhouses. The “simple” facilities seem to be an opportunity for the trainees to experience the real life in the villages where they will live. Of course there are pros and cons about this. Thankfully it did not last long, the condition as described above lasted 2 years, then with the support of International Donor Foundation was built a training hall complete with cottages and bedrooms for 48 people. On August 18, 1982 was inaugurated as the Campus of Bina Swadaya Training which is now better known as “Wisma Hijau”.

One of the ongoing training programs to date has been the training of the Self-Help Group (TPKS). The initial TPKS training program was conducted for 3 months, but is now shortened to 1 month. Of course Wisma Hijau will not be efficient if it only serves the internal interest of Bina Swadaya for training TPKS and therefore is then opened to the public. In addition to training, Wisma Hijau can be used for seminars, workshops, work meetings and other meetings. The current capacity of Wisma Hijau is 200 beds, with several large and small meeting rooms (classes) so that some parallel training programs / seminars / workshops can be assembled. These service users come from government institutions, non-governmental organizations, religious institutions, universities, and private institutions that each year achieve occupancy rate of 70%, making Pusdiklat a community development infrastructure agency as well as income generation.

Policy Dialogue and Consultancy

Bina Swadaya has conducted advocacy or advocacy activities since Pancasila Farmers Association era, which is conducting the problem of land and commodity price. In the next journey it is increasingly realized that the spirit of advocacy is inherent in the direct practice of community empowerment programs and therefore the term policy dialogue is more widely used by Bina Swadaya people. The policy dialogue takes place since the formulation, implementation and post-program process. Therefore, the policy dialogue approach is not done with a confrontational approach, because the government and corporation are Bina Swadaya’s partners in empowering the community.

One of Bina Swadaya’s experiences shows that the number of Self-Help Groups (KSM) served by Bina Swadaya directly reaches only 3,000 KSM. However, when community empowerment efforts are conducted in collaboration with various government and corporate agencies, the number of KSMs grown reaches about 1 million KSM with members of approximately 25 million families. Some programs that have been done include:
1) Cooperated with the National Family Planning Coordinating Board (BKKBN) with the support of The Ford Foudation in the Women Participation in Development program, has successfully established and assisted 650,000 UPPKS Groups with 13.5 million families (1983-1989 ).
2) In collaboration with the National Development Planning Agency (BAPPENA.S) and the Ministry of Home Affairs in the context of poverty reduction and the management of revolving funds in underdeveloped villages, has succeeded in establishing and assisting 120,000 KSMs with members of approximately 3.6 million families (1993-1998 ).
3) In cooperation with the Ministry of Agriculture in the Farmers and Fishermen Development Program (P4K) Farmers Development Program (P4K) has successfully established and assisted 60,000 smallholder farmer groups (in the 1990s).
4) In cooperation with Bank Indonesia, Bank Rakyat Indonesia, and GTZ in relation to the Banking and KSM Program, it has succeeded in establishing and assisting 34,227 SHGs with 1,026,810 family members receiving financial services in more than 1000 Bank offices. (1987-1998)
5) In cooperation with Perum Perhutani and Ford Foundation within the Social Forestry Program in Java Island and with the support of 50 NGOs and a number of Universities, has successfully established and assisted 9,000 Forest Farmer Groups (1986-1998).
6) Implementation of Integrated Irrigation Program, in cooperation with Ministry of Public Works and District Government in North Sumatra, Subang and Banten (West Java) has been implemented Integrated Irrigation Program with farmers empowerment through the establishment of water-use farmer organizations (1987-1998).
7) In cooperation with the Asian Development Bank in the framework of the Tsunami Recovery Program, 2,173 KSMs have been established in Aceh and Nias (2005 – 2008)
8) In cooperation with the Provincial Government of Bengkulu in the framework of the Earthquake Disaster Recovery Program has been formed 5.132 KSM (2008)
9) In collaboration with the Amungme and Kamoro Community Development Institutions for the Assistance of the Amungme and Kamoro Community Development Institutions (LPMAK) in Papua has formed 2,074 KSM (2008-2009).

Policy Dialogue Activities have also been undertaken as members of Micro Finance Competition Breeding Team with Bank Indonesia (2001) and with Regional Representative Council (2008) both failed to become Law. In 2010-2011 joined the Ministry of Interior team compile the Civil Society Act.

Development and Microfinance Services

In order to improve the empowerment of the poor especially in rural areas, Bina Swadaya believes that the poor are not the have not but the have little. The potential they have is small, if managed well with educational inputs of various ways and developed in togetherness and solidarity and accompanied appropriately, will be able to solve their problem problems. Applying this thinking to community empowerment, Bina Swadaya developed three strategies: first, encouraging the formation and development of solidarity institutions called NGOs; secondly, promoting production and marketing efforts by publishing Trubus agricultural magazines, as described above; third, develop and serve the needs of capital through microfinance. Development and microfinance services are conducted through the following approaches:
1) Development and microfinance services from Bina Swadaya to farmers and rural poor have started since Pancasila Farmers Association (1960s) by encouraging members who joined in the KSM to save and collected funds are channeled back as credit for the development of productive business members, both which is managed by members individually or collectively. Bina Swadaya assists the administrative system with the training of Group Managers and simple policies, for example with zero cash policy. This means that all the savings funds collected at each member meeting (weekly or monthly) are immediately distributed as credit to members’ needs, in such a way that the Treasurer only has a minimal amount of funds available for operational purposes. This is intended to avoid misuse of funds, given in the villages there is no banking institution to save funds. In Micro Finance discourse, this activity will be called Saving Led Microfinance.

2) Saving Faithful Savings (TSK) and Loyalty Kawan (KSK). The program was created around 1976 to serve KSM members whose ever-increasing capital needs to support business development thanks to Bina Swadaya’s assistance. Through this program KSM-KSM save and get credit service from Bina Swadaya. Thanks to the support of donor agencies, Bina Swadaya is able to give credit 5 times from KSM savings, and the return rate of KSK is above 95%. Through this program, KSM is encouraged to increase their savings in the form of TSK in Bina Swadaya. The savings are then used for frozen savings for the required credit. In this program, market interest rates apply, the loan period is adjusted to the type of business. Development of TSK / KSK program, it is practical to make Bina Swadaya function as a banking institution. In order to avoid allegations that Bina Swadaya has engaged in illegal banking practices, Bina Swadaya adopted a new policy of transferring group savings to the nearest bank. This policy is also to educate savings groups in the bank.

3) Bank Relations – KSM. The growing number of KSM assisted by Bina Swadaya from time to time, and the additional requirement of business capital from among its members, can not be fulfilled by Bina Swadaya TSK / KSK Program. Faced with this problem, Bina Swadaya seized the opportunity to engage in the Bank-KSM Relation Program, as mandated by the APRACA Workshop (Nanjing, 1986). Bina Swadaya played a very active role in the preparation of this program with Bank Indonesia, Bank BRI, and GTZ in 1987. This program is interesting, because it is a breakthrough that allows banks to serve small communities (through groups) who lack sufficient physical security and formal institutions. By serving the common people through groups, banks have an advantage in terms of: First, reducing transaction costs, which if undertaken indvidually is too high and not worth the credit awarded. Secondly, through the collateral substitutes system of joint responsibility and the existence of social pressure within the group, enabling the ensuring the security of the credit provided. For KSM itself, the HBK program has allowed them to connect with banks, which has been difficult to do. Through the HBK program, there has been capitalization at the village level, especially with the enactment of a 1: 8 saving link and loan system. Thereby reversing the current situation, where banks are more widely considered to siphon funds from village to city. This program is not only beneficial for microfinance services for Bina Swadaya assisted NGOs but also other NGO assisted groups. The HBK program which in the microfinance discourse is called the Linkage Model is described further in the next exposure.

4) Financial Services of Banking Institutions. In 1992, Bina Swadaya established four BPRs (BPR Jati Arta Swadaya Yogyakarta, later renamed BPR Bina Arta Swadaya Yogyakart, BPR Tata Arta Swadaya Lampung, BPR Abdi Arta Swadaya Subang (the in 2010 became Cooperative) and BPR Kebomas Gresik Unlike the BPR in general, BPR Bina Swadaya provides micro credit services to groups, in addition to individuals.The factors that encourage the establishment of formal financial institutions (Bank) are:

Although the promotion of the HBK Program has been widely implemented, the reality shows that many banks (both commercial banks and BPRs) prefer to provide credits with tangible collaterals. This resulted in the number of participant banks of the HBK Program, moving very slowly. This resulted in the coverage of the HBK Program, not too broad.

Although the HBK Program has adopted market mechanisms, as well as Bank Indonesia’s liquidity credit facility for its participating banks (microcredit program from ADB loan), the program’s ability to grant credit to the group is slow. This resulted in the group’s credit needs, not being met on time.

Besides these two factors of operational experience, there are also government policy factors. In 1988, Bank Indonesia issued a PAKTO (October Package) 28, a government regulation allowing institutions such as Bina Swadaya to establish BPRs, small banks operating at the kecamatan level.

In 2011, the number of customers of 3 BPR Bina Swadaya groups reached 32,685 customers (savings and credit customers) with savings collected amounting to Rp. 25.01 billion and outstanding credit reached Rp. 28, 33 billion. Banking practices that specifically serve micro businesses are often called Micro Banking.

5) Microfinance Services ASA Model. To improve the broader Microfinance Services Program in 2002 Bina Swadaya adopted the Bangladesh Assosiation for Social Advancement model. Some characteristics of the ASA model include: (a) The reach of the customer rapidly grows, as it is required in a day a credit officer must serve 3 groups of customers with close proximity; (b) Fast credit service is made directly in member meetings; (c) simple administration and bookkeeping system; (d) the credit pattern of the minggguan; (e) Without collateral. Currently, the implementation of ASA’s financial service program is done through 8 branches of Microfinance Services (PKM) namely: PKM Branch of Babakan Sari, Bandung; PKM Branch Boyongsari, Pekalongan; PKM Branch Cikarang, Bekasi PKM Branch Ambassador Mekar, Bogor; PKM Branch of Kenari Mas, Bogor; PKM Branch of Johar Baru, Central Jakarta; PKM Branch Mill, East Jakarta and; PKM Pulo Jahe Branch, East Jakarta. The institutional branch offices of PKM are under the coordination of Bina Swadaya Micro Finance Development Center. The number of customers from eight PKM branch offices in 2011 reached 6,920 customers (savers and credit customers) with total savings collected amounting to Rp. 964.98 million and outstanding credit Rp. 2.66 billion. Medel microfinance service is called credit led microfinance.

More About PHBK

One of the phenomenal activities of Bina Swadaya’s microfinance services is the Bank and Non-Governmental Relations Program (PHBK). The concept of the HBK Program was developed as a follow-up to the Nanjing Conference, People’s Republic of China (1986) on financial services for poor agricultural and rural communities. At that time Bina Swadaya presented the experience of providing financial services for farmers and rural communities through the KSM Organizations (INGOs) organized by the Asia Pacific Rural and Agricultural Credit Association (APRACA) and the Asian NGO Coalition for Agrarian Reform and Rural Development (ANGOC) . The two organizations stand on the initiative of the Food and Agriculture Organization (FAO): APRACA is based in Bangkok while ANGOC is based in Manila. APRACA is an association of bank and non-bank financial institutions established to encourage the growth of agricultural and rural enterprises through financial services, while ANGOC is a co-installation of Asian NGOs in the field of rural development and agrarian reform.

One of the important recommendations of the workshop in Nanjing is to appeal to APRACA members, to follow Bina Swadaya to do financial services to farmers and rural inhabitants who are generally not bankable. This advice is extraordinary because it is against the banking laws. Given that APRACA members from Indonesia, Bank Indonesia (BI) and Bank Rakyat Indonesia (BRI) did not attend the forum, Bina Swadaya felt obliged to socialize the workshop results to them. Then a series of meetings with BI and BRI were conducted to bring forth a historic program for Indonesian microfinance, the Bank Relation Program and Self-Help Groups (HBK Program) which began in 1987.

The HBK program is a pattern introduced by BI to banks to develop financial relationships between banks and micro businesses with a group approach. The main participants of the HBK Program are Banking Institutions (Commercial Banks and Rural Banks), Non-Governmental Organizations with micro-enterprise development programs, and Self-Help Groups (SHGs).

There are three PHBK models. First, the Bank conducts financial services directly to SHGs and establishes cooperation with NGOs in the framework of establishment and / or coaching. The role of NGOs is called Chanelling Agent. Second, the Bank provides financial services to KSM through NGOs. Financial services and KSM development are carried out by NGOs as Executing Agents. Third, the Bank provides direct financial services to KSM and banks as well as the role of group coaches. The credit agreement is made with the Chairman of the KSM who obtains the power of its members on the basis of the decision of the members meeting.

The program runs successfully. Referring to BI’s 2001 report, the PHBK program involves more than 1000 bank offices and 257 NGOs spread across 23 provinces from 27 existing Provinces with Self-Help Groups (KSM) targeted to reach 34,227 SHGs with 1,026,810 members. This program managed to accumulate savings of approximately Rp 29.5 billion and credit distributed Rp 331 billion, with a credit return rate of 97.3%. But the program has stopped, because of the economic crisis of 1998, Parliament and the Government of Indonesia promulgated the Law on Bank Indonesia (1999) which prohibits BI to manage program credit. But since the 1997s PHBK model has been adopted by National Bank for Rural Agriculture and Rural Develpoment (NABARD), India and the bank now claims to have served 3 million KSM with about 60 million customers.

Stakeholder Forum

In 1993, the number of poor people was 25.9 million. Through a variety of intensive poverty reduction programs, then for 3 years the number of poor people decreased to 22.4 million. However, with a prolonged economic crisis, the number of poor people rose to 49.5 million (1998).

The tremendous economic crisis, pushing the Indonesian Government with the help of the World Bank launched programs to empower the people’s economy, while reducing the number of people who are below the poverty line. These programs are under a large umbrella known as the Social Safety Net (JPS). With the support of Rp 8.9 trillion for APBN 1989/1999, JPS is aimed at 4 main areas, namely food security, social protection, employment creation, and development of small and medium industries.

The practice of this JPS has been heavily criticized by NGOs. Briefly these criticisms include:
1) Target JPS misdirected. The target group of the JPS program is mostly the new poor community who are the victims of layoffs, while the older, bigger poor communities are less touched by the program.
2) JPS does not have a vision of community empowerment. This program approach is colored by program crashes that are more concerned with achieving quantity, followed by top down and not transparent process.
3) JPS turns off community self-sufficiency. Many programs with community-based and empowerment-dimensional models and approaches implemented by various technical agencies, NGOs, and communities themselves are disregarded by the presence of the JPS Program.
4) The occurrence of false participation. JPS programs do invite NGOs, cooperatives, and other community organizations to participate as program implementers, but this participation is more due to donor pressure rather than capacity to implement community-based programs. On the other hand, the JPS Program has also encouraged the development of NGOs in areas set up only for the benefit of the government and its programs. This kind of NGO is often called “impromptu” NGOs, “red plate” NGOs, “order” NGOs, and the like.
5) JPS charged politilk (status quo). Programs originally intended to tackle economic and social crises, provide opportunities for political use, especially by the status quo.
6) JPS makes departments uncoordinated. The JPS program is set to be a priority program, so that the departments, both relevant and non-relevant, are fighting for budget allocations.

In order for such conditions are not getting worse, so special in these small people empowerment programs, need to be done a breakthrough again.

Bina Swadaya, after observing the weaknesses and strengths of various small community empowerment programs undertaken by both government and NGOs, finds that in addition to the above weaknesses, there are forces that can be the starting point for further development together, with a passion for a new Indonesia better. These forces are the emergence of the same approaches in the form of group development, micro financing, and mentoring.

Much social capital is in the form of groups that have been built into empowerment programs of the poor. The number of such groups is estimated at 1 million. They are the Joint Business Group / KUBE (built by the Ministry of Social Affairs, Income Generating Family Income Effort / UPPKS (National Family Planning Coordinating Board), Inpres Desa Tertinggal / IDT (National Development and Development Agency and Ministry of Home Affairs), Forest / (Ministry of Forestry), Income Improvement Project for Farmers and Small Fishermen / P4K (Ministry of Agriculture), Joint Groups / Non-Governmental Groups (NGOs), etc. In terms of quality, Even if it requires a touch of empowerment, the efforts made even from one group to another can be different, which obviously does not start from scratch.

Experience of HBK Program as best practice of microfinance program in Indonesia, giving pattern of empowerment program for poor community, as well as developing partnership relationship among institutions that operate in microfinance service (Bank – Non Government Organization – Self Help Group) which have strategic value for microfinance empowerment process effective and efficient. The credit schemes enforced in this program can continue to be implemented, without the need for special assistance from foreign funds.

Microcredit Summit (Washington, 1997) that agreed on the principles of microfinance development: 1. Reaching the poorest, 2. Reaching and empowering women, 3. Building Financially sustainable institution, 4. Measurable impact, has inspired and is a new reinforcing element to improve development and microfinance services as a Sustainable Movement.

The joint Movement for Microfinance Development (GEMP PKM) was formed as a forum for microfinance stakeholders. This forum was declared before the President, dated March 10, 2000 in Jakarta. The Indonesian PKM echoes are supported by various strategic stakeholders, namely: Banking Institutions, Non-Governmental Organizations, Government Institutions, Institute of Studies / Higher Education, Real Sector, Civil Society Organizations, Mass Media, and Donor Institutions.

The Goal of Indonesian PKM echoes is to tackle the problem of poverty and socio-economic disparity by empowering microfinance. While the specific objectives are: (a) to increase the number and quality of microfinance institutions (MFIs) in order to more optimally impact them; (b) increase the participation of individuals, groups and organizations of fund holders in support of microfinance development; (c) increasing access to capital to micro-entrepreneurs.

Echoes PKM Indonesia has held three National Microfinance Development Meetings, namely in 2002 held in Jakarta, the second National Meeting held in Surakarta, Central Java (2005), and the 3rd National Meeting held in Yogyakarta (2008). The meeting was attended by an average of over 600 delegates from various institutions. In March 2012, Gema PKM will hold its fourth national meeting in Jatinangor, Bandung, West Java.

Gema PKM Indonesia became the vocal point of the international microfinance network, the Global Microcredit Summit Campaign, established in 1997 and headquartered in Washington. As a vocal point, Gema PKM Indonesia has conducted activities of coordinating Indonesian participants to attend the Asia Pacific Regional Microcredit Summit in New Delhi (2000), in Dhaka (2004), Global Microcredit Summit in Halifax, Nova Scotia, Canada (2006) and co -host Asia Pacific Regional Microcredit Summit in Bali (2008) attended by 1100 participants from 56 countries. The PKM echo also collects the achievements of microfinance services in Indonesia.

In 2008 Gema PKM joined the Universiteit Leiden (Netherlands), Pajajaran University (UNPAD, Indonesia) and the Mediterranean Agronomic Institute of Chania (MAICH, Greece) developed a new Master Degree Program on Integrated Microfinance Management and Development. This program has been completed and opened September 2011. (*)