Policy recommendations Gender in Entrepreneurship Indonesia

Nining I. Soesilo, UKM Center FEUI www.ukm-center.org www.icpps.org +62811179997 Presented on ADB OECD February 28 2012 in Manila

The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their use. The countries listed in this paper do not imply any view on ADB's part as to sovereignty or independent status or necessarily 1 conform to ADB's terminology.

From Survival to Entrepreneurship

Large Entrepreneur 0,01% 4,52 thousand

Medium Entrepreneur 0,24%= 120,25 thousand

Entrepreneur

4,05% Small Entrepreneur 2,02 thousand

Survival
95,7% Usaha Mikro 47,70 thousand
ENTREPRENEURS that are comparable with other countries are only 0.18%, there is missing middle,
Entrepreneurs contribute up to 56.7% of GDP, account 19,4% of total export, and employ 79 millions of work force

Source: from BPS 2007, BERITA RESMI STATISTIK No. 28

Framework of Government of Indonesias Policy for Entrepreneurship (no gender related policy)
Central Government Level Policy Direct cash in cluster 1 aid PNPM: National survival Community cluster 2 Development Program KUR: People's Business Credit through Bank in micro entrepre cluster 3 which 70% credit risk are neur guaranteed by government SME Law 20/ 2008 for SME Sectoral Policy Bank Regional Government Similar to direct cash in aid Similar to PNPM like PPMK in DKI Jakarta

KUBE-Ministry of Social affair and other Ministries

State own bank:People's KUR is now disbursed in PKBL_Ministry Business Credit cooperation of State own through Bank in which 70% credit with Regional Company risk are guaranteed Development by government Bank Commercial lending
3

PKBL: Policy for Entrepreneurship Development in Indonesia from Ministry of Sate Owned Enterprise
Ministry of State owned Company Policy No. Per-05 - 2007 PKBL compliance to laws and regulation PKBL= Partnership and Environment Fostering Program In year of 2011, Ministry of State State Owned Company set the amount of money for revolving fund program (PK) for SME funding is Rp 2,05 billion In this policy, no words about collateral being mentioned. No words about gender is mentioned

Policy for Entrepreneurship Development in Indonesia from Directorate General of High Education Ministry of National Education
Program to develop entrepreneurship in University with grant for the selected proposal with the amount of Rp 15 million Program for developing internship on University Business Consultancy dan job placement (Konsultasi Bisnis dan Penempatan Kerja) No words about gender http://www.dikti.go.id/dmdocuments/PROGRAM%20P ENGEMBANGAN%20BUDAYA%20KEWIRAUSAHAAN.pdf
5

Indonesia Position:
Indonesia GEI rank is 55 ( second worst after Lao, the indexs range of values is from 0 to 100, with the lower values indicating greater inequity), Empowerment only 16 (the lowest in Asean), Education is 3rd highest in Asean
Case Study: Two Level of Entrepreneurship: survival and entrepreneurial level Case study of Survival level :
Pilot Project in Rangkapan Jaya Depok CSR of Carrefour Indonesia Komida

Case study of entrepreneurial level: PKBL for MSME:

PKBL Rekayasa Industri PKBL Antam PKBL Mandiri

Assisting at the Survival Phase: poverty alleviation

Assisting at the Survival Phase: Performing Debtors (PD) According to Sex in HusnayainCarrefour Microfinance
Sex Female Male Total Person 63 138 % Sex 31.30% 68.70% PD 45 86 131 %PD 71.40% 62.30% 65.20%

201 100.00%

Average Loan Rp 2,183,663,Conclusion: Female are better performing debtors than male even though they get less share
8

Assisting at the Survival Phase: University involvement in commercial Grameen Bank (Komida) for all poor women debtors

University involvement in commercial Grameen Bank (Komida)

10

Assisting at the Survival Phase: University involvement in commercial Grameen Bank (Komida)

11

Assisting at the Survival Phase: Komida now has 44 branches all over Indonesia

12

Assisting at entrepreneurial phase: the Micro Small Medium Enterprise Segmen in monthly Exploring SMEs event at the University; it is always started with national anthem

13

Performing Debtor According to Sex in PKBL

PKBL PT REKIND UKM Center FEUI, Average Loan Rp 47,176,471

sex female male total

sex female male total

person %person PD 32 37.64% 20 53 62.35% 18 85 100% 38

person %sex PD

%PD 62.50% 33.96% 44.71%

% PD

PKBL PT ANTAM, Average loan Rp 29,830,769

8 18 26

30.77% 69.23% 100.00%

7 13 20

87.50% 72.22% 76.92%

Conclusion: Female are perform better than male even though they get less share

14

Performing Debtors (PD) According to sex in PKBL Bank Mandiri - UKM Center FEUI
sex female person 27 % sex 45.0% PD 15 % PD 55.6%

male
total

33
60

55.0%
100.0%

27
42

81.8%
70.0%

Average Loan Rp 13,616,667,Conclusion: Female are perform worst than male even though they get less share, it might be because Bank Mandiri do the autodebet in repayment?

15

Competitiveness Indonesia: wages in garment is one of the most expensive one in Asia
Wages in the Garment Industry [Monthly in US $] Bangladesh 43* Cambodia 61* China 150-200 India 50 Indonesia 155 Vietnam 63-90* *= Minimum wage as of August 2010. Vietnam has a range for minimum. China is the reported prevailing wage. Indonesia is the wage for industrial workers in June 2010. Garment workers wages have generally been close to the average wage in industry..
Source: Gustav Papanek 2010
16

Indonesia is keeping on loosing job

Country World Bangladesh China Indonesia India Vietnam Cambodia 1989 US$ Billion 193.4 0.8 15.4 2.0 3.9 0.0 0.0 % share 100 0.4 8.0 1.0 2.0 0.0 0.0 1998 US$ Billion 335.8 4.2 42.9 5.0 9.3 1.5 0.0 % share 100 1.3 12.8 1.5 2.8 0.4 0.0 2008 US$ Billion 612.1 12.0 185.2 10.0 21.1 10.6 3.7 % Share 100 2.0 30.3 1.6 3.5 1.7 0.6 2009 US$ Billion 526 11.7 167 9 20.5 10 3 % Share 100 2 31.7 1.7 4 2 0.5

in Textiles, garments: Indonesia: a 1% gain in share of the world market= about 1.5 million jobs (Papanek 2011); Indonesia only 22,67% of laborers work in manufacturing and female owners only 38,07% (Tulus Tambunan 2012) In 2011: Indonesia loss the share of 23,31% on bilateral trade with Cina in 2011 , if for from this amount textile of Cina share is 18.6% (according Indonesian Trade Ministry's Foreign Trade chief Deddy Saleh), hence 65,047 people are loosing job from RI s loosing share with China
17

Indonesia is keep on loosing job

18

Conclusion & Recomendation

Women most likely have reliable and prudent when given a chance to receive credit; unfortunately the number of female debtor always less than male debtor (for non homogenous gender type of credit) Because Indonesia is keep on loosing job (while male have more share in funding), give amore chance to women entrepreneur in Indonesia Give more pro women policy for raising the role of women entrepreneurs that are missing in Indonesia Empowerment in GEI isonly 16 (the lowest in Asean), hence the empowerment for entrepreneurs in Indonesia should be given more can be done (1)through grameen type activity of credit for poverty alleviation all forwomen as well as (2) through entrepreneurship assistance, give more chance for women

19

Ready for further discussion

Thankyou Nining I. Soesilo, UKM Center FEUI www.ukm-center.org www.icpps.org +62811179997

20