Samantha Marinelli (MALD 2023) brings financial services to women working in informal economies in Bali

How successfully can financial literacy help women establish future savings accounts, microlending, and insurance in Bali, Indonesia lifting them out of poverty? That is the premise of my proposal for a women-run and women-serving bank that includes lending services, savings accounts, insurance policies for emergencies, childcare, and financial literacy courses, to be located in the more rural area of Buleleng. This is work I began as an undergrad when I studied in Buleleng for the summer of 2018, but now I am working through the deeper intricacies of launching this bank as my Fletcher capstone project. 

My start up financial institution is called SP3 Finance, or Pengembangan Dan Permberayaan Untuk Semua Perempuan Melalui Keuangan which translates to “Development and Empowerment of All Women through Finance.”  S stands for “semua” meaning “all” and 3 (tiga) P’s “pengembangan” for “development,” “permberdayaan” for “empowerment,” and “perempuan” for “women.”  The word “perempuan” for women is used instead of “wanita” because traditionally “perempuan” is linked to social movements and the struggle for gender equality and equity.

Mission

SP3 Finance empowers Balinese women in the informal sector to invest in themselves and their futures through microcredit lending and saving, emergency insurance pools, professional development classes, and employment opportunities, while also relieving some of the childcare burden they face.

Vision

SP3 Finance envisions a world where all women have adequate and accessible financial opportunities to pursue their academic, professional, and personal goals.

Position statement

For women working in the informal sector, SP3 Finance is a banking institution that offers savings accounts, loans to those looking to start or expand their businesses, and emergency insurance so that they can achieve financial independence, personal growth, and a sense of community, because we believe that financial security can alleviate so much more than just poverty.

Theory of Change

If we provide women in the informal sector in rural areas of Bali access to microloans, savings options, emergency insurance pools, professional development classes, and employment opportunities…

 Then women can expand their businesses or invest in their futures in a sustainable way by relieving financial burdens …

And they can become financially and individually empowered. 

Our participants currently include women across the Buleleng regency of Bali who are engaging in business operations in the informal sector, such as a warung (small shop or restaurant) near or at their home, or in other sectors of the informal economy, as well as those interested in new employment opportunities such as banking, teaching, or childcare, or who are just unable to access basic financial services to plan for their futures.  The women are direct participants, but their success will lead to opportunities for their entire families and communities as well.

As of 2015, the Indonesian government has implemented the “New Branchless Banking and Micro-finance Laws” as a way to make finance more inclusive and accessible to the lower middle class and poor populations across the country.  In Bali alone as of 2022, over 200,000 individuals are below the poverty line and would all be categorized as individuals needing access to microcredit and savings as a way to improve their livelihoods.

The average income for informal employment in Bali, as of 2019, is approximately Rp. 562,187 monthly, or about 36 USD, and the informal economy. The average income for those in formal employment, by comparison, is Rp. 1,722,003, or about 110 USD.  It has been noted that the Buleleng Regency is grouped in with the regencies that have the second to last lowest average informal income as compared to formal.

Women make up just under half the population of Bali, and even prior to COVID-19 women were faced with a triple burden of care work, income-generating work, and ceremony work that they would be completing on a daily basis.  Across Indonesia, as of 2018, 57.51% of the total female workforce was working in the informal economy, and they are paid about 20% less than men.  Following COVID-19, these burdens have only increased, particularly around care work as loved ones were falling ill, paired with a financial strain due to the inability to complete a lot of income-generating tasks due to lockdowns and restrictions. 

Buleleng is the largest regency and spans across the entire northern portion of the island.  Aside from a few cities right on the coast, Buleleng has very few tourist areas and is majority farmland.  Upon the initial lockdown in April of 2020, 45.36% of Buleleng women’s incomes fell, and the tourism industry took a particularly bad hit as travel was restricted.  For these reasons upon the onset of COVID-19, women’s participation in professional work started to fall from 45.5% of women in 2019 to 43.54% in 2021.  Those who had to leave professional work as the world shut down found themselves back in the informal sector, and those who remained in the informal sector found it even more difficult to shift to formal work. 

Buleleng is also the regency with the third lowest rate of completing high school and the lowest rate of enrollment in higher education, with 16.82% of residents having never completed any formal schooling, 27.05% completing primary school, 22.35% completing junior high school, 27.09% completing high school, and 5.22% completing a professional degree.  Within these, the majority of those completing each level of education are men.  Women are not receiving formal education and are finding themselves getting married, having families, and working in informal businesses rather than pursuing professional degrees and work.  Indonesia is in the top ten of countries with the most child brides, and one in four girls are married before the age of 18, according to UNICEF.  Access to financial literacy classes and financial services can put women in a better place to go back to school or access more secure work, and set up their children for futures where they can pursue professional degrees and work.

After interviewing women across Buleleng, it became clear that the further away you move from the largest city, Singaraja, the fewer financial resources residents had access to.  One of the villages, Pancasari Village, about an hour drive from Singaraja, is a largely agricultural village best known for its strawberry farms.  Access to banks and ATMs are incredibly limited, and with working days being from sunrise to late into the night there is little time left over to travel to Singaraja during business hours, especially when there are children to care for, house chores, and ritual work to complete during and after the working day.  With my team in Buleleng, we calculated that there are approximately 110,000 women living in poverty and in rural areas of Buleleng who are lacking access to financial services, and SP3 will be targeting them directly to improve their livelihoods.

The next step for SP3 Finance is to submit the proposal to impact investors interested in supporting a bank in Indonesia, and then the timeline moving forward will be finding our first physical location and hiring staff so we can begin rolling out financial literacy courses to lay the ground work for future savings accounts, microlending, and insurance.

*IBGC’s Experiential Learning Fund (ELF) is pleased to support entrepreneurial endeavors and capstone initiatives like Samantha’s.