Koperasi Kasih Indonesia approach is designed to create sustainable impact in a sustainable way:
Koperasi Kasih Indonesia adapts worldly-recognized microfinance approach to local condition and combines it with highly-needed financial education:
- What is microfinance? Banking and/or financial services targeted to low-and-moderate income businesses or households (ACCION)
- Does it work? Microfinance is worldly-recognized: “Access to formal financial services is by now widely recognized as critically important to alleviating poverty” (World Bank). Muhammad Yunus opened world’s eye when he received Nobel Prize in 2006 for his work with Grameen Bank. It serves ~9 million people in Bangladesh today
- How does Koperasi Kasih Indonesia apply it? Koperasi Kasih Indonesia adapts Grameen Bank approach to fit the condition of people it helps. One example duration of the loan, which changed from 50 to 25 weeks
- Why financial education? Koperasi Kasih Indonesia observed and learned from various sources that while income determines what COULD happen with someone’s life, financial management ability produces what ACTUALLY happened. High income does not guarantee progression
Koperasi Kasih Indonesia operates as a social business instead of non-profit. Social business is a business which aims to maximize social impact and deliver the support using business approach (produce its own revenue)
- Does social business helps people? Social business fits with people who have capacity to create value but lack resources, in KKI case the poor who can work but lack capital to do it. Koperasi Kasih Indonesia provide needed resources (capital) and they repay it back together with interest.
- Why not support people for free like common non-profit? Koperasi Kasih Indonesia observes that giving support for free to people who could create value in continuous manner will grow “beggar mentality” in them. By requiring them to pay the loan back together with interest, Koperasi Kasih Indonesia empowers them to be independent
- Why social business is sustainable? As social business, Koperasi Kasih Indonesia needs donation only until it reaches 2,000 borrowers (in 1 office). Afterwards, its revenue could cover its costs, and therefore donation is no longer needed. Common non-profit institutions live from donation throughout their live. It is not the case for Koperasi Kasih Indonesia.