Indonesia: Business Savvy Credit Unions Make Sense to Vendor (1996)

   This document has been made available in electronic format  
     by the World Council of Credit Unions and the Committee 
     for the Promotion and Advancement of Cooperatives COPAC


     Sri Mujiati's life can be divided into those years
     before credit  unions and those since she became a 
     member in 1979. The difference is compelling; it's 
     called success.  

Off and running  

At the urging of a friend, Mujiati joined her first credit union
and soon went into business for herself. In 1980, she began to
make meatballs to sell at the local market in her village. The
challenge of running such an enterprise doesn't stop when the
goods are ready; it requires extra ambition and resources to
transport them from her home to the marketplace in Malang, on the
east end of the long and narrow island of Java.  

Mujiati has the ambition, but occasionally she needs a financial
boost to keep things running smoothly. Her latest loan was for
US$125 (250,000 rupiah).  

"Without the credit union," she says, "I would have no way to get
a loan because I don't have qualifying collateral required by the
banks here."  

Changing and growing  

Mujiati's meatball business lasted for five years, until 1985,
when she noticed that the market was saturated with meatball
vendors. So she changed her product to cookies, which she sold
for three years, and changed again, to selling noodles for
another three years. In 1991, Mujiati switched courses once more,
this time betting on banana chips. Finally, she seems to have
found her niche.  

The banana chips have proven to be popular items: deep fried,
flavored and then packaged in snack-size wrappers. Just as the
demand for her product has grown, so has her business. Having
started as a one-woman enterprise, she now has a business partner
and 10 employees. And instead of working out of her home, she now
rents a building with a room for cooking and one for packaging.
She also now ships her banana chips to the urban market in
Jakarta on the western tip of Indonesia.  

Eye on the future  

Mujiati says the demand far outweighs her current resources, and
she [Image] is looking to her credit union for a loan to help
expand the business. Most immediately, she'll use the money to
rent or buy a truck so more deliveries can be made. In addition,
she'll need more capital to buy more bananas and employ her
workers full time.  

In the future, Mujiati hopes to diversify her business by
producing and selling two other products: meat seasonings and
potato chips.  

Sharing her success  

Mujiati's business savvy has also translated into a success story 
for Satu Bambu Credit Union, whose membership is market vendors.
That alone is satisfying for the credit union movement, but
Mujiati's credit union gets an added bonus: her expertise and
service as secretary of the board.  

Amidst her professional activities, Mujiati has had personal
success as well. She is raising four children by herself and
supporting her mother, too. With the help of her credit union,
she has been able to send her children to school and make
improvements to her home, a comfortable, two-room structure.  

"Through credit union savings and loans, people can improve their
welfare," she says. Though that message is simple, it is quite
new to Indonesia, where only 200,000 of its 180 million people
are credit union members.  

     The information and photographs were supplied by Lucy Ito,
     the World Council regional manager for Asia and the South
     Pacific. Kelly Radloff, a credit union volunteer, wrote the
     story, using the information provided.