Microcredit Programmes in Development in Rural Indonesia: Gender, Cultural, and Religious Perspectives

Abstract

The overall aim of this research is to evaluate how a UN funded group-based microcredit programme was implemented (considering Javanese culture and Islamic teaching) and what impact it had on achieving gender equality in rural Indonesia. The research seeks to form a comprehensive assessment and understanding the interconnection of gender, Javanese culture and Islamic teaching in the functioning of local savings and loan groups (Affinity Groups/ AGs) established as part of an IFAD funded project in Eastern Java (Participatory Integrated Development in Rainfed Areas/ PIDRA). This research demonstrated that AG can be analysed by hybrid organisation theory, due to its combination of multiple logics, value systems, stakeholders, and goals/missions. As a case study, the research applies a combination of qualitative research methods: document analysis (review of documents), focus group discussion (FGD), and semi-structured interviews. The fieldwork was conducted over three months (April-June 2012). Semi-structured interviews were conducted with 38 participants; 8 PIDRA team representatives and 30 AG members. The study shows that poverty indicators, socio-cultural and religious aspects both influenced the initial process of AG formation i.e. selection of villages and identification of intended beneficiaries of AG members. Strengthening institutional capacity through the formation of AGs, a Federation of AGs, and a Rural Development Institution (RDI) helped the AG members to be involved in various aspects of decision-making in rural development. The findings also confirm that Javanese culture and Islamic teaching influenced AG members’ views and behaviours with respect to gender and microcredit activities; and these aspects have had an impact on the continuity of microcredit programmes. However, although the microcredit programme delivered by the AG had a transformative impact on women’s ability to earn incomes benefits and gender awareness, they tended to increase their workload.
Keywords: Microcredit, Affinity Group, Hybrid Organisation, Gender, Javanese Culture, Islamic Religion

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ORCID for Silke Roth: orcid.org/0000-0002-8760-0505

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