KPP UMKM’s Innovative Microfinance Scheme Boost Access to Improved Water Supply and Sanitation for the Urban Poor
The access to improved sanitation facilities in Tangerang District is still very low. A large number of low-income communities in the district regard that to build toilet at home is expensive. As a result, sanitation have never been considered a primary need by its residents. Many attempts to address this issue have been tried but to no avail until an innovative type of microfinance method was introduced by KPP UMKM, a local cooperative for Empowerment and Development of Small-Medium Enterprise to promote microfinance for water supply and sanitation in Tangerang District.
KPP was established in 2002 to help improve the economic situation of the poor through providing loans for small and medium enterprises, home industry, school fees, and home renovation. Later, through IUWASH advocacy, KPP further developed new microfinance schemes for water connection (namely Mikro Tata Air) and toilet with proper septic tank (Mikro Tata Sanitasi) under the home renovation loans ‘Tata Griya’. The Director of KPP UMKM Syariah, Kamarudin Batubara said, “We are committed to optimize KPP’s function to be one of the institutions which its members can rely on to improve their welfare and health. We aim to provide poor families, especially our members, to have clean water and sanitation facilities as it is crucial to improve their life’s quality”.
In Tangerang and Serang districts, KPP currently serves 18 sub-districts or 248 villages with a total of 111,000 members with staff of 371 people. As per December 2014, the total asset of KPP reached IDR 188 Billion. However, KPP once had unsuccessful ‘Tata Griya’ scheme implementation. Thus, they were very happy when IUWASH provided training on sanitation promotion and toilet design with septic tank construction in accordance with the Indonesian Standard (SNI). Equipped with these training, KPP was able of expanding its marketing of Mikro Air and Mikro Tata Sanitasi schemes. The demand for their services eventually resulted in a long waiting list of households’ requesting to construct proper new toilets at their homes. Based on KPP’s data, it was determined that almost 40% of its 75,000 total members still do not have proper toilets. KPP needs to find additional funding to be able to response the demands.
IUWASH then linked KPP to other stakeholders who have the same vision of improving sanitation. Through some meetings and facilitation, KPP received grant of IDR 2.3 billion from Water.Org to support its water and sanitation microfinance scheme. Later through Water.Org, KPP also received another financial support from KIVA with USD $600 for the same scheme. Currently, there are more than 1,500 low income families benefiting from having access to sanitation and clean water connection through this microfinance schemes. KPP UMKM-Syariah’s Director, Kamarudin Batoebara said that KPP UMKM-Syariah’s main goal is to break the poverty cycle in Tangerang District and ensure their prosperity. “We hope that through this program, Tangerang District residents, specifically the low-income communities can improve their quality of life through improving their sanitation facilities. Staying healthy is the easiest way to start improving our quality of life.”
After all the hard works, KPP has received three recognitions; an award from the Indonesian Cooperative Ministry as a successful cooperative, followed with award from the Governor of Banten for their innovative microfinance scheme model for water and sanitation, and the recent one is an the AMPL Award 2015 for non-governmental institutions category from the National Development Planning Agency or BAPPENAS.
Titin (35 years old), a mother with 6 children from RT 011/RW004 Tanjakan village of Rajeg sub-district received loan for 6 million from KPP UMKM Syariah for toilet construction (one latrine plus bathroom and 2 sealed septic tank). Her husband works as construction labor and earn around Rp. 200,000 per day. The microfinance program helped her family to improve their sanitation condition at their house. From this program, she expects to have better and convenient condition for all family member to do defecation. She is satisfied with the quality of materials and the design. “I am happy to have my new toilet because my house become cleaner even though I have to pay installment Rp. 54,400 per week,” she said.