Microenterprise stock-taking : the financial institutions development, Puskowanjati Women"s Cooperative, Maha Bhoga Marga, and Yayasen Dian Desa projects, Indonesia

Major activities consist of support to rural credit institutions; the Puskowanjati Women"s Cooperative, an umbrella organization of women"s cooperatives; and the Maha Bhoga Marga and Yayasan Dian Desa private voluntary organizations. Except in the case of Yayasan Dian Desa, which concentrates on introducing appropriate technology to raise incomes and generate employment, A.I.D."s support for these institutions has focused on strengthening their credit services. All the projects established sound business procedures, displayed moderate to high levels of financial viability, and greatly increased the poor"s access to institutional resources. In particular, the credit projects" low transaction costs and easy access are a benefit to the poor while high interest rates and a diversified portfolio ensure institutional sustainability. The net effect is increased employment and income generation, which stimulate economic growth through broad-based linkages and multiplier effects. In sum, the experience of these projects shows that it is possible, even in less than optimal economic and regulatory environments, to assist the poor by treating them as entrepreneurs through a decentralized, business development approach rather than through poverty-focused programs.