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Box 9 Community Empowerment for Rural Development in Indonesia

The project is aimed at reducing poverty in 11 districts in six Indonesian provinces by increasing the incomes of about 110,000 poor families beyond the poverty line and empowering the rural poor to plan and manage activities that affect their livelihood. This objective will be achieved through participatory village planning and the formation of community-based savings and loan organizations (CBSLOs), which will provide the rural infrastructure needed to link the urban and rural areas.

Indonesia has about 4.3 million poor households, of which 0.5 million are headed by women. One in every 10 households headed by women is poor.

Rural women in the project area contribute to economic development in major ways through their involvement in agriculture, petty trading, and wage labor activities. However, they are constrained by low wages and lack of access to capital, skills training, appropriate technology, and market facilities.

The project aims to deal with these constraints. Women will compose half of the membership of CBSLOs for microenterprise development, half of those who will undergo capacity-building and leadership training, and half of the project facilitators in the villages. The recruitment of women facilitators will create job opportunities for women from the community.

Women’s groups will be formed in the villages to take part in village planning. Women will thus be able to identify the constraints on their economic activities and livelihood and have their needs considered in the local government’s development plan. Women’s participation in the village planning recognizes women’s important role in the village economy and community affairs.

The CBSLOs will provide women with access to microcredit from banks in the formal sector for expanding their microenterprises or investing in new ones. Women will thus be able to invest in both farm and nonfarm enterprises to create productive assets. Through the urban-rural linkage component of the project women’s enterprises will gain access to marketing facilities.

Women will receive human development and leadership training to improve their capacity to voice out their needs in village planning and in the operation and management of CBSLOs. The CBSLO management committee will include a woman leader.

Gender and development consultants will be recruited, women’s NGOs will be involved in project implementation, women will be given equal participation in microcredit activities and in operation of CBSLOs, and a gender-disaggregated monitoring system will be installed.