Integrated Microfinance Management and Sustainable Development in Indonesia
Faculty of Economics & Business, Universitas
Leiden Ethnosystems & Development (LEAD)
Programme, Universiteit Leiden
The United Nation has just launched a Post-2015 Development Agenda which has 17 development goals to be achieved namely Sustainable Development Goals. While Poverty Alleviation is still possessing as the first and foremost goal to be achieved, microfinance in one way and another is believed as one of tools for poverty reduction. Recent research reveals that although microfinance has given positive impact to development measures, however, the contribution to poverty reductions is still far beyond expectation. While Karnani (2007) stated that Microfinance misses its mark and doesn’t cure poverty, Roodman (2012) underscored that the best estimate of the average impact of microcredit on the poverty of clients is zero. Duvendack et.al (2011) further confirmed their assessments from methodological point of view.
As poverty is a multidimensional problem, alleviating poverty by microfinance should also be approached by multidimensional remedy. Warren, Slikkerveeer& Brokensha (1995) introduced the importance of involving cultural dimension in development. Later, Imboden (2005) as well as Woodley et.al (2006) and Loeffelman (2010) supports the idea of integrating culture into microfinance and development. Integrating microfinance with culture in development brings to consider other factors than economy. It encompasses environmental factor as well as social factor (UN 2014) as sustainable development concept suggests. Thus, Slikkerveer (2007) introduced a concept of Integrated Microfinance Management (IMM) by using Sustainable Development approach. Some examples of IMM has been implemented in Indonesia such as Lembaga Perkreditan Desa in Bali, Lumbung Pitiah Nagari in West Sumatra, and Perelek and Gantangan in West Java shown that poverty reduction, yet need to be accomplished through integrated development concept which is suggested in sustainable development. It links with the improvement of life quality, well-being as well as liveability (Winston&Eastaway 2008).
Topic: Green Business