Case Studies

PT Holcim Indonesia: Micro Business Development in Narogong and Cilacap

Project description

Working with community leaders to reduce poverty in the areas surrounding our plants, Holcim Indonesia is encouraging micro-business development through the support of community-administered revolving funds in Narogong (West-Java), and Cilacap (Central Java).

Objectives

Having injected the necessary start-up funds in 2006, the initial objective was to develop the micro finance institutions (MFI) to a level of complete self-sufficiency and independence by 2010. The communities make deposits and receive loans from funds, and MFI management ensures the effective distribution of resources. As value for both Holcim and the MFIs, Holcim will seek the support of MFI staff for future community training programmes; in this way, MFIs continually develop the skills and potential of the community.

Activities

Micro finance institutions have been established in nine villages around the Holcim plants, and have been provided the framework with which to manage their own funds. Initial capital and training was provided by Holcim, and the institutions have been widely promoted through door-to-door activities. The MFIs collectively have assets of USD 450’000 and are able to and borrow from national banks. Total beneficiaries exceed 5,000 households.

Successful micro-businesses supported by MFI funds include fish and crab farming ponds, mushroom farming, cattle farming, and construction material retail. Skills training workshops were conducted on developing business concepts, and IT skills were strengthened to support community projects.

Results

The MFIs are run with full teams of local tellers, marketing officers, and day-to-day managers. In mid- 2011, just over 4’000 people had an account in Narogong. Total assets of the MFIs exceed USD 450’000 – many times Holcim’s capital contributions. The Narogong institution now runs profitably, sustainably and independently of Holcim, although Holcim remains involved in entrepreneurship training and other training for borrowers.

Status: September 2011