Indonesia: Empowering Rural Women Through Community Development - 2010

Project Result / Case Study | 1 May 2010

Ibu Etna was a housewife before she became involved in the Community Empowerment for Rural Development Project (CERD). At first, she became a member of the community based savings and loan organizations (CBSLO). As a member, she received training on financial management and received consistent support and encouragement from the project's field facilitators to assume additional community responsibilities. Today, she heads the District CBSLO Association and has decided to run for a district government position. She is now more confident in public spaces and has gained status and respect within her family and the wider community.

Ibu Etna's story is representative of many of the 22,000 women members of the CBSLOs supported under the CERD project implemented by the Ministry of Home Affairs in 11 districts in 6 provinces between October 2000 to August 2007. The range of project activities impacted the lives of approximately 116,600 rural women.

The CERD project recognized the value of women's participation in economic activities and as important actors in the community, within the local government decision-making and agenda setting processes. The project's support to improving women's access to credit and financial services led to increased income generating activities for women and a 38% reduction of families living below the poverty line. Approximately 65% of borrowers were women—most of whom had previously little or no income The project achieved impressive poverty reduction and women's empowerment results. At project completion, there was significant reduction in people living below the poverty line from 73% to 32%–37%. 

Lack of access to credit and financial services remains a major challenge for women’s access to economic opportunities and incomes, in rural Indonesia. While women are considered to be an important market for microfinance, over the last 20 years, the average proportion of women served by major microfinance institutions has remained stagnant at around 25%. For women, one of the main obstacles to credit access is lack of collateral.

The Project

The aim of the Community Empowerment for Rural Development (CERD) project was to increase incomes of poor rural communities living in the periphery of rural growth centers. The key objectives included strengthening institutional and human resource capacity of the local governments in planning and managing their own development activities; development of rural financial institutions including the establishment of community based savings and loans organizations (CBSLOs) to support micro and small enterprises; and improvement of rural infrastructure to link communities to markets, promote agricultural productivity and off-farm business enterprises.

The Project was implemented by the Directorate General of Community and Village Empowerment (DGCVE) of the Ministry of Home Affairs (MoHA) in 11 districts in six provinces, between October 2000 to August 2007. 

The project's gender action plan (GAP) focused on engendering both the process interventions well as the outputs. It promoted women's strategic gender interests by facilitating their greater political participation in community decision making; improving their skills in some non-traditional areas such as business development, finance and accounting; and strengthening the local institutional framework for  gender mainstreaming.

The key gender strategies included:

  • Mobilizing and organizing women's groups for enabling women's participation and addressing their special needs;
  • Establishing targets for women's participation both as project implementation staff and as beneficiaries, in decision making groups, and in positions of responsibility: in village planning committees, CBSLOs, in all the training activities; 
  • Coaching women for leadership positions in the inter-village community groups, CBSLO operations and filling applications for local government positions; and
  • Incorporating special measures to enable poor women and marginalized groups to access credit and participate in village development planning processes.

Practical Benefits for Women

The project GAP facilitated high levels of participation in project activities by women and as a result women had good access to project resources such as training and finance.

  • 43% of facilitators employed were women;
  • More than 306,000 villagers participated in the community based planning and management (CBPM) process in villages to plan larger scale village infrastructure of which 38% were women;
  • Women comprised 29% of membership of groups responsible for implementation of rural infrastructure using village grants;
  • 38% of the 306,959 beneficiaries of community training were women;
  • 32% of village cadres  trained were women;
  • 55% of the 40,018 CBLSO members were women;
  • 65% of CBSLO borrowers were women; and
  • Women trained included 34% diploma, 43% bachelor's degree, 60% master's degree, and 7% overseas master's degree.

There were many practical benefits for women. Women were able to access credit for income- generating activities through their membership of CBSLOs. This resulted in increased incomes which meant women could contribute to household expenses including the costs of medical care and school fees. Training provided to women improved their financial, business, leadership, and management skills. This enabled women to increase their participation in village activities including the planning and implementing of village infrastructure projects. Women were able to borrow independently of their husbands; they had control over their own credit and income. Women's reliance on money lenders was substantially reduced. They had increased income and mobility, increased time savings, and other benefits from improved village infrastructure (roads, bridges, and other rural infrastructure benefited men and women by improving household lighting and drinking water).

Strategic Changes in Gender Relations

Access to skills training in financial management and microenterprise development along with access to credit was highly valued by women. Women on CBSLO management committees were able to meet women from outside their communities, gain skills in financial management and accounting, deliver training to CBSLO members and learn from a wider set of experiences. Increased mobility offered these women new opportunities for interaction in the public sphere. Access to new skills and credit allowed them to contribute more to household income, gain financial independence and confidence, and participate in the community in new roles.

An important strategic change reported by women and men was that men’s view of women and their status in the family had improved because men valued the extra income that women contributed to the household. Women reported that they controlled the money borrowed either solely or jointly with their husbands. Both men and women reported that this led to more openness between husbands and wives at home because they needed to work together and be honest with each other to ensure that loan money was repaid.

As a result of women’s participation in CBSLO management there were some signs of changes in the gender division of labor in the household. For example, one female CBSLO member opened the CBSLO office twice a week and during these times her husband took care of the children.

An important change for both men and women was the development of social capital within the community. A sense of trust and community closeness through participation in and ownership of CBSLOs by all the community.

Challenges that Remain

While women’s participation in the project was generally high it tended to be concentrated in areas of capacity building and CBSLOs. Women's participation in rural infrastructure activities tended to be lower. One reason provided for women’s limited participation was their lack of technical skills in construction related activities and planning. Future projects need to address this barrier by giving more attention to ways in which women’s participation can be maximized in rural infrastructure activities. Similarly, there was also limited participation of women in project management. More emphasis on the recruitment of women in project management teams to model good practice would have been useful.

Gender stereotyping was common in the types of entrepreneurial training offered to women. For example, women received training in home industry, snack production and food processing while men received training in agricultural production—which was more financially lucrative. More attention needs to be given to more diversified skills training for women that have higher income earning potential. Gender differences in the size of loans, their income-generating potential and the total amount of loan finance disbursed to women and men need to be included as part of the routine monitoring of all credit related activities.


The inclusion and implementation of GAP in the project led to significant gender-equality results. Organizing and encouraging women's participation in CBSLOs through setting targets yielded important practical benefits. Access to training and credit provided women with opportunities for income-generating activities leading to improved incomes. Their involvement in village committees, community groups and CBSLO management resulted in strategic benefits such as space to voice their interests, a larger role in public and community life, improved status in the family and community and greater respect and support of males within the family and in the wider community. The enhanced public role of women also led to their increased physical mobility beyond the household and village environment. Women in the project areas achieved recognition and enhanced their role in local political and economic development processes. While some of these changes may not appear significant, these small steps were a giant leap towards women's empowerment in rural Indonesia.

Summary of Gender Equality Results

The following table provides a brief summary of GAP provisions and the gender-related results achieved by the project.

Loan Component/
GAP Provisions

Gender Equality Results

Project objective:

  • Increased incomes of the poor and empowered rural communities – Women's participation targeted
  • Average household monthly income doubled from Rp897,000 to Rp1,849,000. There was a significant reduction in people living below the poverty line due to access to credit (from 73% to 32–37%); women who previously earned little or nothing contributed to increased household income.

A. Capacity Building for Decentralized Development Planning, Institutional and HRD:

  • Training for local government staff and targets for participation
  • Women encouraged to apply for government positions
  • High participation of women with most targets for women’s participation in training met.
  • Females trained included 34% diploma, 43% bachelor's degree, 60% master's degree, 7% overseas master's degree.
  • 43% of 663 facilitators employed were women.

Provision of village grants for community training program:

  • 50% participants in community training are women.
  • 2 women representatives in village planning committees.
  • 50% NGO project facilitators are women.
  • Community based planning and management (CBPM) groups involved 8,300 women (40% compared with a target of 50%).
  • Women: 38% of the 306,959 beneficiaries of community training.
  • Women: 29% of groups responsible for implementation of rural infrastructure using village grants.
  • 43% of facilitators employed were women

B. Development of Rural Financial Institutions (CBSLOs):

  • 50% women  in the CBSLO and microenterprise training
  • At least half of CBSLO members and borrowers will be women.
  • Training for CBSLOs will emphasize inclusion of women in all aspects of operations. Minimum of 50% women to benefit from CBSLO training.
  • Women in leadership positions on CBSLO management.
  • 55% of 40,018 CBLSO members were women.
  • One woman ran for District government as a result of training, skills and confidence gained through participation CBSLO management.
  • Women were trained in savings and loan management and service delivery which increased their confidence to manage household finances (women were 55% of trainees).
  • More women involved in community decision-making through membership of CBSLOs.

Provision of financial services:

  • Lending levels and terms flexible to meet the needs of women requiring small or short-term working capital.
  • Lending policies tailored to meet demand of women entrepreneurs and skewed in favor of poor women.
  • Women’s access to credit increased. More than 65% of borrowers were women.
  • Women were able to borrow independently of their husbands and had control over their credit and income.
  • Women’s reliance on money lenders was substantially reduced.
  • Women’s mobility increased.
  • Women’s status increased in family as men valued the extra income they contributed to the household.
  • Women and men more aware of their potential and led to increased confidence to undertake income generating activities.
  • CBSLO activities promoted social capital including active connections between people; trust and mutual understanding and community closeness.

C.  Improvement of Rural Infrastructure:

  • The infrastructure facilities will be selected using a participatory approach.
  • More than 306,000 villagers participated in the CBPM process in villages to plan larger scale infrastructure investments including 62% men and 38% women.
  • 1,858 village-level cadres were trained and employed to facilitate CBPM processes and 32% were women.
  • Roads, bridges and other rural infrastructure benefited both men and women including by improving household lighting and drinking water.
  • Women’s confidence improved to speak out in community meetings.

* Data in this table has been sourced from fieldwork and from ADB, 2008. Ministry of Home Affairs, 2007, 2007a, and 2008.