1. SOCIAL ENTREPRENEURSHIP BINA SWADAYA SHARING KNOWLEDGE AND EXPERIENCE By: Bambang Ismawan May 26, 2016 05/26/2016Bambang Ismawan1

2. INDONESIA 05/26/2016Bambang Ismawan2 2 SIDES OF A COIN

3. ONE SIDE: Good News Indonesian Economy in 2011 the highest growth in ASEAN: 6.5% Inflation rate in 2011 was 3.79%, much lower than 2010, which reached 6.96%, the lowest among BRIC In 2011 Indonesia was just given the appreciation of investment grade by Rating lFitch, after 14 years The level of government debt in 2011 is relatively lower (25.70) than other countries the main growth centers of the world, ASEAN and developed countries Source: Advertorial Ministry State Own Entreprises in Kompas Newspaper, December 28, 2011 05/26/2016Bambang Ismawan3

4. OTHER SIDE: Cronic Poverty 52% of the rural population still live with poor sanitation 36% of urban population does not have access to clean water Every two hours one mother dies in childbirth due to poor health services 57.1 million enterprise units in Indonesia are MICRO ENTERPRISES, belongs to economically active POOR. Feeding more than 200 million 05/26/2016Bambang Ismawan4

5. 05/26/2016Bambang Ismawan5 POWERLESSNESS OF THE PEOPLE POVERTY UNDERDEVELOPMENT MASSIVE CURRENCY DEVALUATION ARTICLE 33 OF UUD 1945 IS NOT APPLIED IN ECONOMIC POLICY DAMAGED ENVIRONMENT INSTABLE GOVERNMENT COLONIAL INHERITANCE CORRUPTION, COLLUSION, NEPOTISM NATURAL DISASTERS

6. BUSINESS STRATIFICATION IN INDONESIA  Big Enterprises 5.066 (0,01%)  Medium Enterprises 52.106 (0,09%)  Small Enterprises 654.222 (1,13%)  Micro Enterprises57.189.393 (98,77%) Total57.900.787 Source : Ministry of Cooperatives and SME, 2013 05/26/2016Bambang Ismawan6

7. BBC’s Entrepreneurship Survey Results (2011) Indonesia is number one in entrepreneurship, followed by the United States, Canada, India and Australia. Colombia, Egypt, Turkey, Italy and Russia are countries which are less than ideal for entrepreneurs. The survey, called the BBC's Extreme World Series uses a variable perception of culture to support the development of start-ups. The survey conducted on 24,000 people from 24 countries This survey refers to four indicators: 1) the level of creativity and innovation in each country, 2) the level of difficulty of starting a business, 3) level of willingness to start a business and 4) the level of ease of doing business. 05/26/2016Bambang Ismawan7

8. DEVELOPMENT FOCUS 1.Community Based Self Help Organization Development 2.Microfinance Services and Development 3.Community Based Production and Business Development 4.Self Reliance Education and Training 5.Development Communication BINA SWADAYA (Est. 1967) SOCIAL ENTREPRENEUR & PROMOTOR of SOCIAL ENTREPRENEURSHIP A Foundation engaged in the business development, community empowerment, especially economic and social aspects Developing Community-based institutions, such as: Self-Help Groups, Cooperatives, and Micro Banking “TRUBUS KUSALA SWADAYA" Award for Facilitators, Groups and Micro Entrepreneurs ONE FOUNDATION, 14 Companies for Community-based Socio- Economic Development 05/26/2016Bambang Ismawan8

9. SOCIAL ENTREPRENEURSHIP (According to Bina Swadaya Journey) Social entrepreneurship is about social and sustainable development with entrepreneurship solution. Social development : Development effort which includes aspects of poverty alleviation, productive employment & social integration. Sustainable development : Development efforts to preserve the environment and sustainability in the financial sector. (Bambang Ismawan) 05/26/2016Bambang Ismawan9

10. MANAGEMENT CHALLENGE OF SOCIAL ENTREPRENEUSHIP INSITUTION How to help the (poor) people to be able to help themselves in a sustainable manner. 05/26/2016Bambang Ismawan10

11. ENTREPRENEUR Can be classified into 2 :  Business entrepreneur  Social entrepreneur The main differences is the profit utilization  Business entrepreneur : profit for share holder  Social entrepreneur : profit for stake holder 05/26/2016Bambang Ismawan11

12. ENTREPRENEUR The dichotomy between business entrepreneur and social entrepreneur are increasingly blurred because they speak the same language. "We speak the same language: innovation, management, effectiveness, quality and competence“ (Fred Hehuwat, 2007). 05/26/2016Bambang Ismawan12

13. STRATEGY FOR PEOPLE ECONOMY EMPOWERMENT 1. Community Based Self Help Organization Development 2. Microfinance Services and Development 3. Community Based Production and Business Development 4. Self Reliance Education and Training 5. Development Communication 05/26/2016Bambang Ismawan13

14. SELF HELP GROUP (SHGs) Function Vehicle for : Learning and teaching Problem identification Decision making Resource mobilization Communication with the 3rd parties Bambang Ismawan1405/26/2016

15. SHGs OPERATION 05/26/2016Bambang Ismawan15 SHG DEMOCRATIC ORGANIZATION AND PARTICIPATORY OPEN MINDEDNESS INCOME GENERATING ORIENTATION  HOME ECONOMY MANAGEMENT  CAPITAL FORMATION  BUSINESS DEVELOPMENT  TOWARD NEW IDEA  TOWARD NEW COOPERATION  REGULAR MEETING  CADER FORMING  BOARD ELECTION FROM MEMBER  ACCOUNTABLE ADMINISTRATION  PARTICIPATORY PLANNING OPERATION AND EVALUATION

16. FACILITATION Faciliatation is intended to provide technical assistance to the SHGs in order to achieve and increase self reliance. Facilitator is a partner of the SHGs, functioning as a motivator, facilitator and communicator. Facilitator must have the commitment and ability of community empowerment, and for that they need adequate training. In order to develop a sustainable community empowerment, it has developed the concept of Self Reliance Facilitation. 05/26/2016Bambang Ismawan16

17. DEFINITIONS OF MICROFINANCE  Microfinance is Microenterprise finance, (Otero)  Microfinance (CGAP) :  Credit methodology  With effective substitute collateral  For working capital  Short period  For microenterprises  Microfinance (Gema PKM Indonesia):  various financial services (savings, loans, payment, insurance, etc.)  Provided for micro entrepreneurs  applying suitable and contextual system & process. 1705/26/2016Bambang Ismawan

18. MICROFINANCE A new ‘baby’ born by “the Mother” with social advancement orientation and “the Father” with business finance orientation (Tony Fernandes) Development instrument for effective eradicating poverty and sound business (Gert van Maanen) Microfinance basically is a financial service mechanism for the economically active poor, which use simple non conventional mechanism and procedure. Microfinancing has existed in Indonesia for more than 100 years but it has not develop as an industry yet. 1805/26/2016Bambang Ismawan

19. MODELS OF MICROFINANCE SERVICES  Saving Led Microfinance, membership based which capital fund mobilized from the members (micro enterprise), eg. Self-Help Groups (SHGs), Credit Union (CU), Saving and Credit Cooperatives etc.  Credit Led Microfinance, Capital fund mobilized from investors: Governments, Corporations, Philanthropic Institutions and individuals, eg. Village Credit Units (BKD), Rural Fund and Credit Institutions (LDKP), Grameen Bank model, ASA model (Bangladesh)  Linkage Model, utilize existing institutions, namely SHG & Bank, with a special policy where they are connected to work together in a mutually beneficial.  Micro Banking, Banking units designed focus to microfinance services, include BRI, Bank Mandiri, Bank Bukopin, BPR, Danamon Simpan Pinjam 05/26/2016Bambang Ismawan19

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21. COMMUNITY BASED PRODUCTION PROMOTION AND DEVELOPMENT Virgin Coconut Oil Red Fruit Louhan Fish Adenium Aglaonema Anthurium 05/26/2016Bambang Ismawan21

22. COMMUNITY BASED PRODUCTION PROMOTION AND DEVELOPMENT About 50 products  Cupang fish  Lobster  Longan  Tin Fruit  Mahkota Dewa  Jelly Gamat  Essential oils  Reptile  Durian  Sarang Semut  Nepenthes  Chili  Hydroponic Vegetables  Swallow  Sengon tree  Croton  Cassava  Catfish  Dragon fruit  Soursop  etc. 2205/26/2016Bambang Ismawan

23. COMMUNITY BASED PRODUCTION PROMOTION AND DEVELOPMENT Strategy:  Cooperation with research institutes  Publishing in magazines and books  Training and consultation  Marketing promotions through Agro Expo  Managing Agricultural Shops and distribution units 2305/26/2016Bambang Ismawan

24. SELF RELIANCE EDUCATION & TRAINING 1. Training and facilitation for household economy 2. Training for SHGs Facilitation 3. Training for Community Empowerment Management 4. Specific Training: management of agricultural production, crafts, farming, emergency response, etc. 5. Alternative Tourism, CEDEP (Cultural, Environment, Development Exposure Program) 05/26/2016Bambang Ismawan24

25. DEVELOPMENT COMMUNICATION Agricultural magazine publishing: TRUBUS Publication of agricultural books, language, education, health, management, motivation, etc. Develop a production house for television and radio Use social media 05/26/2016Bambang Ismawan25

26. MULTIPLICATION EFFECT 05/26/2016Bambang Ismawan26

27. SHGs DEVELOPMENT Has been promoted and developed almost 1 million SHGs through cooperation with : BKKBN : 650.000 UPPKS Groups (1983-1989). Perum Perhutani (Social Forestry Program) : 9.000 Forest Farmer Groups (1986-1998). Bank Indonesia, BRI, and supported by GTZ : 34.227 SHGs (1987-1999). Integrated Irrigation Program, with Department of Public Works and Government of North Sumatra, Subang dan Banten (1987-1998). BAPPENAS & Ministry of Internal Affair designed programs IDT (Lagged Village Instruction) : 120.000 SHGs (1993- 1998). 05/26/2016Bambang Ismawan27

28. SHGs DEVELOPMENT Ministry of Agriculture for P4K Program : 60.000 small farmers and fishers groups (in 1990-ies). ADB for Post-Tsunami Recovery Program : 2.173 SHGs di Aceh and Nias (2005 – 2008). Government of Bengkulu in the framework of Disaster Recovery Program Earthquake : 5.132 SHGs (2008). Amungme & Kamoro Community Development Organization in order Facilitation for Amungme and Kamoro Community Development Organization (LPMAK) di Papua : 2.074 SHGs (2008 – 2009) 05/26/2016Bambang Ismawan28

29. GEMA PKM INDONESIA (THE INDONESIAN MOVEMENT FOR MICROFINANCE DEVELOPMENT) Poverty alleviation and people economy empowerment (through microfinance) will meet its momentum in wider collaboration Bina Swadaya initiated the establishment of Gema PKM Indonesia which was declared in front of President of Republic Indonesia at the State Palace on March 2000 It is a stakeholder forum that comprise 8 element : government, financial institutions, NGO, mass organization, academic/research organization, business sector, donor/international institution, mass media Held 4 National Meetings (in Jakarta, 2002 ; Solo, 2005 and Yogyakarta, 2008 & 2012) and 1 International Microcredit Summit (in Bali, 2008) Participated in drafting Law on Microfinance Institution Its activities are capacity Building, Network Building, Policies advocacy 2905/26/2016Bambang Ismawan

30. THE INDONESIAN MOVEMENT FOR MICROFINANCE DEVELOPMENT INDONESIA MICROFINANCE INSTITUTION ARCHITECTURE BANK, COOPERATIVE, MFIs NON BANK & NON COOP’ 05/26/2016Bambang Ismawan 30 RATING CAPACITY BUILDING CAPACITY BUILDING WHOLE SALER SUPERVISION 1.Reaching The Poorest 2.Reaching and empowering women 3.Building financially sustainable institution 4.Measurable Impact

31. SOCIAL ENTREPRENEURSHIP ECOSYSTEM: MOVEMENT FOR SUSTAINABLE EMPOWERMENT Bambang Ismawan31 SELF HELP INSTITUTION SERVICE PROVIDER SELF HELP FACILITATION INSTITUTION SYNERGY FUCTIONING INSTITUTION Local Government 05/26/2016

32. MULTIPLICATION EFFECT Village Owned Business According to Village Law in 2014 05/26/2016Bambang Ismawan32 74.000 villages across Indonesia Village- Owned Companies 1.Self-Help Group Promotion and Development 2.Micro Finance Services & Development 3.People Industries Development 4.Applied Appropriate Technology and Environmental Protection 5.Local Specific and Creative Economy Development

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34. SOCIAL SOLIDARITY ECONOMY 05/26/2016Bambang Ismawan34 Basic Assumptions Liberal- Capitalistic Solidarity Economy RESOURCESScarceAdequate CAPITALFinancialSocial STRATEGYCompetitionCollaboration BENEFITProfit for Shareholder Benefit for Stakeholders ENVIRONME NT NegligenceRenewable, Protection

35. Bambang Ismawan Founder & Chairman of Bina Swadaya Fundation Founder & Chairman Trubus Agriculture Magazine Founder & General Secretary of Indonesian Movement for Microfinace Development Founder & Chairman of Indonesia Social Entrepreneurship Association Founder & President of Sinergi Indonesia Founder and Chairman of Persab (Perhimpunan Sahabat Bangun) Flobamora Founder and Chairman of ASEC (Asia Solidarity Economy Council) Indonesia Founder and Vice Chairman of ISEA (Institute of Social Entreprenurship in Asia), Manila Founder and Board of Trustee of Unlimited Indonesia Email : b.ismawan@gmail.comb.ismawan@gmail.com 05/26/2016Bambang Ismawan35