Beyond Outreach: Evaluating the Bandung Rural Bank-s Kredit Melati Programme in Bandung,West Java
Kurniawan Saefullah
Faculty of Economics and Business, Universitas Padjadjaran
Abstract
Microfinance has been acknowledged as a tool in alleviating poverty. It provides various schemes of funding support which enable the poor to lift up their standard of living. In response to its importance, Local Government of Bandung imposed a supporting funding policy to the ‘economically active poor- through several credit schemes, i.e. Kredit Melati, Kredit Mesra and Kredit Bagja, with the intermediary of Bank Perkreditan Rakyat (BPR) Bandung. This paper attempts to describe an early evaluation to the effectiveness of such policy and programme . Using descriptive analysis, this paper concluded that although the programme has reached thousands of clients, however, the effectiveness of this credit policy is under questioned as it has only been evaluated from the perspective of outreach, but not yet from its sustainability. Furthermore, recent researches in microfinance suggest to identify further the clients from their precondition and categorization, i.e their over-indebtedness, which in many cases will not lift up their standard of living as well as their microenterprises.
Keywords: Microfinance, Outreach, Sustainability, Over-Indebtedness, Rural Bank
Topic: Strategic Management, Entrepreneurship and Contemporary Issues