Discussing a Cooperation Agreement between BPR Magelang and Dinas Perkim Magelang City on Microfinance for Sanitation
USAID IUWASH PLUS supported the Housing and Settlements Office (Dinas Perkim) of Magelang city to discuss a draft on cooperation agreement (PKS) between Dinas Perkim and BPR (rural bank) Magelang on microfinance for sanitation in Magelang city on November 1, 2018.
As a part of Dinas Perkim’s measures to improve people’s sanitation access, the office has built SPALDS and SPALDT (onsite and offsite domestic wastewater management systems) for the poor communities. The SPALDS and SPALDT constructions has begun in 2017 and 2010, respectively using DAK (special budget allocation) and provincial grant. Currently, there are 90 SPALDS and 35 SPALDT built by Dinas Perkim using these two financial sources.
However, in view of the technical guidelines for the fund use, Dinas Perkim is only allowed to finance the plant and piping network construction, while the recipients should self-finance the construction of the house connection to their respective house.
Unfortunately, some beneficiaries, especially those belong to low-income groups, cannot afford building the house connection which costs about Rp500,000/unit. Therefore, the sanitation microfinance will become a funding source for the poor community members to build house connections.
Dinas Perkim decided to cooperate with BPR Magelang because this microfinance institution has already had credit products for water supply and sanitation, and it has worked with PDAM Kota Magelang for the water supply credit.
During the discussion on the cooperation agreement, Dinas Perkim and BPR Magelang with supports from USAID IUWASH PLUS shared key points to be included in the agreement. For example, Dinas Perkim has the rights to receive data from BPR Magelang on the community members receiving the sanitation microfinance. Through this discussion, Dinas Perkim and BPR Magelang agreed on the PKS draft.
“I hope, through this cooperation agreement, BPR Magelang contributes to make the 100-0-100 program in Magelang city successful,” said Hery Nurjianto, the Executive Director BPR Magelang.
As a follow up, the Cooperation Bureau of Magelang City will consult the draft with the Legal Bureau before the Head of Dinas Perkim and the Director of BPR Magelang sign it.
USAID IUWASH PLUS will promote this microfinance product to the community members more once the PKS is established and signed.
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