Quarter Report: Indonesia Liquidity Facility After Disasters (ILFAD) Program

The program, known as the Indonesia Liquidity Facility After Disasters (ILFAD), is implemented by Mercy Corps Indonesia. ILFAD conducted a workshop with 25 cooperatives from eastern Jawa Timur Province on disaster risk reduction and liquidity management. The workshop introduced disaster risk reduction approaches and existing disaster saving and micro-insurance products. ILFAD also provided training for three cooperatives and two rural banks in Jogjakarta on disaster risk reduction and micro-insurance. The program has made significant progress in developing the cloud system for MFIs, with 13 MFIs registered and their data stored in the cloud system. However, one MFI, BPR Pujon Jaya, has not registered due to technical problems related to its operating system. ILFAD is working with Indonesian Cloud to resolve this issue. ILFAD has also made progress in establishing a disaster pooling fund with Bank Mega Syariah and several rural banks in Malang. The fund will be used to manage pooled funds for MFIs in West Sumatera and Malang. Additionally, a disaster saving product, Sincan, was launched in Kartini Cooperative in Jogjakarta, and an index-based insurance product was approved by the Indonesian Financial Service Authority (OJK). At the close of Q18, the total number of disaster saving clients is 2,392, and the total number of micro-insurance clients is 1,607. ILFAD has trained 30 MFI officials on disaster risk reduction and liquidity management. The program is facing challenges from OJK West Sumatera on the bundled disaster saving micro-insurance product in West Sumatera, but ILFAD is expecting to increase the protection of MFI clients with disaster saving and micro-insurance in East Java in the next quarter. ILFAD Program Phase 3 is set to end on June 30, 2016, and the program is confident that most program outputs will be reached by this time. However, the number of MFI clients adopting disaster saving and micro-insurance products is still below program targets. ILFAD is planning to support the development of governance structures and identify relevant issues and regulatory challenges to the current models. The program is also preparing a No Cost Extension (NCE) request to extend the closing date to September 30, 2016. ILFAD has achieved several outputs, including improved capacity of MFIs on disaster risk reduction and liquidity management. A total of 228 MFIs have participated in disaster risk reduction and liquidity management training, with 64 MFIs participating during ILFAD Phase 3. The program has also established a cloud system as data storage for MFIs, with 13 MFIs registered and their data stored in the cloud system.