Why Does Bank Hard to Empower People’s Economy?
Empowering the people’s economy in remote areas of West Kutai turned out to be a tough struggle for anyone. Even those who believe that banking is an “agent of development” who plays a key role in empowering the people’s economy can be “disappointed” in witnessing the harsh reality of the difficulty of banks to partner closely with poor people’s economic actors, both in the Ulu Riam region in Mahakam Ulu, in the villages mountain villages, as well as in the lowlands along the Mahakam River. Although the Regional Government of West Kutai Regency has appointed Bank Melak BPD to channel MSME funds to small businesses of the “people’s economy” of Rp. 7.5 billion from APBD funds, the recipients of these DPM (Community Empowerment Service) funds have yet to feel any concern and special treatment for those who are entitled to receive “special” treatment because of their poverty.
Yulius Seran (37 years old) is a person with a disability who waits for “miscellaneous” merchandise on the side of the road near Linggang Bigung. He was “angry” when the loan request of Rp. 15 million was only given Rp. 7 million whereas the Rp. 8 million has been promised to a friend who is able to make a special motorcycle so he can use it to shop at Melak once a month.
Even though Yulius Seran was later known to be an honest and obedient member of his loan installments every month, the Bank BPD was not moved to pass the remaining loan he requested. Apparently lending credit to a poor man like Yulius Seran was not enough to convince bank officials “as a way of paving the way for him to enter heaven”.
The Bank is a Wealthy Partner
Since the last 3 years (2001-2003) the amount of public funds deposited in 2 banks in Melak (BRI and BPD) has increased by an average of 12.0% per year, from Rp. 214.2 billion (2001) to Rp. 256.0 billion (2002) and Rp. 272.4 billion (2003). Interestingly, the percentage increase in third party funds deposited in these banks is not followed by a commensurate increase in the amount of credit given to entrepreneurs in Melak. LDR (Loan Deposit Ratio) although it tends to increase but only amounted to 2.2% (2001), 10.8% (2002) and 13.8% (2003) and up to September 2004 it was 32.1%. It seems that if there is no “MSME” credit channeled from the district government APBD funds, there are no signs that the banking sector is “eager” to extend credit to entrepreneurs in Melak, especially to small-scale people’s economy businesses.
It is indeed ironic. On the one hand small businesses run to “moneylenders” by paying high interest, but on the other hand rich people keep their money in banks in the form of deposits by receiving “attractive” interest. Money lenders and depositors enjoy high interest income, and vice versa the poor must pay high interest to rich people.
If the people’s economy can be empowered through soft credit so that their welfare increases, why are the local governments not compelled to take such rare steps in GSM (Sendawar Makmur Movement) by channeling as much microcredit as possible to the people’s economic businesses that need it. It turns out that the key cause lies in the enactment of the capitalist economic system that has been chosen by the central government. In a capitalist economic system all efforts are made to protect the interests of investors / owners of money, which by providing guarantees of security to the owners of this capital. Then there is a credit guarantee institution, and in relation to the distribution of MSME loans there is the KKMB (Bank Partner Financial Consultant) institution, which is financed by a portion of the credit interest paid by the credit recipient (debtor). Why is there no Financial Consultant for People’s Economic Partners (KKMER) even though it is clear that the people’s economy needs the most consultancy services, not the bank that actually does not need the financial consultant.
If stimulation and protection to capital owners in the capitalist economic system is not considered sufficient, Bank Indonesia has long issued SBI (Bank Indonesia Certificate) promising attractive interest to the banking world to save funds collected from regions throughout Indonesia . Determination of attractive interest rates is always used as an easy reason for the banking world not to distribute funds as credit to the business world. This SBI interest has ever reached 17.5% per year which is certainly a very strong reason for each bank to send third party funds collected in banks in regions throughout Indonesia to be sent to Jakarta. This is the cause of the low LDR (Loan Deposit Ratio) value in each region, so that when many poor / disadvantaged regions scream for cheap and easy credit, yet banking funds collected in such areas are actually sent to the central office the bank concerned. Banks that send more funds from the regions to the central office are always easy to explain this misconduct because of the “difficulty in identifying” economic and business projects that are bankable that can be funded, even though it is true that these banks do feel more safe to use funds raised by buying SBIs.
It is clear from this analysis that banks in Indonesia are none other than profit seeking / pursuing institutions, and are not agents of development at all. If our banks are more companies that prioritize interest income, in order to be able to pay deposit interest services that are attractive to depositors, even including additional attractive prizes such as cars and luxury homes, then it is very difficult to make banks as drivers of people’s economic activities . As a result, it is also impossible for banks to act as institutions that support major efforts to eradicate poverty.
The “small” case of banking behavior in West Kutai District with 42% poverty in 2003-2004 is interesting to be used as an example of how big the obstacles faced in poverty eradication programs. If a region is poor, some members of the community have succeeded in “becoming rich” so that they are able to save the funds collected at the local bank, it would make sense for banks to utilize these funds for the economic empowerment of the people and in turn be able to eradicate poverty. The process of helping and helping between capital owners and the people’s economy who need capital in the era of regional autonomy should develop well and be passionate. But why doesn’t this happen? From this analysis it can be proven that the main reason is because the capitalist-liberal / neoliberal economic system has become the main handle of the central / regional government which is applied everywhere throughout Indonesia. In a capitalist economic system, capitalists (capitalists) are the most revered and respected party, whose interests are the most protected. From this developed the belief that the need to create a climate stimulates so that foreign investors (investors) are willing to come to Indonesia or to certain areas to invest their capital.
Actually, one contradiction can be recognized immediately. If an area is trying to attract investors, that is, those who have capital, why is capital collected in banks from local wealthy people being sent out of the area, and instead it is not played or invested in local businesses. This contradictory phenomenon will never change at any time, unless we dare to change our economic system from the capitalist economic system to the Pancasila economic system. In the Pancasila economic system, banking policies are not directed at overprotecting capital owners, but must be transformed into a total effort to empower the people’s economy with the ultimate outcome measuring the realization of social justice for all people.