Cikeusal: Success Working Shoulder to Shoulder with Local Government

Cikeusal Kecamatan, Banten Province, Indonesia, November 2007 - When new sub-district offices of the Kecamatan Development Program open in Banten Province, they go to Cikeusal to see examples of best practice. Cikeusal boasts a strong Financial Management Unit (FMU), proactive local facilitators, innovative programs, even a welcoming office decorated with pictures of local infrastructure projects—documentation that stands as a testament to villages’ success and an inspiring example for others as they begin their own work.

The Kecamatan Development Program (KDP) is a key component of the Indonesian government’s poverty reduction plan, the National Program for Community Empowerment, known most commonly by its Indonesian acronym, PNPM. KDP provides direct block grants to the poorest rural villages in Indonesia ranging from Rp. 500 million (US$ 55,000) to Rp. 1 billion (US$110,000) per sub-district or kecamatan.

Standing Proud: Cikeusal’s new staff. After four years of hard work, the kecamatan’s program has become a model.

KDP funds are also allocated for a micro-credit program for local women. In Cikeusal, 3,150 women are presently borrowing Rp.1,041,278,803 (US$113,499). Another 162 women are waiting to borrow Rp.198,800,000 (US$21,669).

Those visiting Cikeusal today can hardly imagine that only four years ago this program was in a state of collapse. In 2003, poor socialization of KDP principles and rules led to problems in every aspect of the program. Most damaging, money from infrastructure projects and loan payments had been embezzled. When the mess was discovered, the entire Financial Management Unit was fired, save one, and a new, expanded staff began to rebuild the program.

Thee new staff faced a significant legacy of bad practice. Loans needed to be repaid, other money needed to be recovered, and program messages had to be conveyed again and again to break the patterns and beliefs formed during the first year.

Working with Local Government to Solve the Problem

The new staff was helped immeasurably by an injection of political will from the new sub-district head (camat), Yoyo Wicahyono. Prior to Pak Yoyo’s arrival, the FMU had approached the local government for help resolving past problems, but without results. Some leaders of savings and loan groups had embezzled funds, as did kecamatan staff. Certain kecamatan government staff had also insisted that villages pay tax on their project funding, in violation of KDP regulations.

Pak Yoyo immediately saw the potential benefits KDP could bring the Cikeusal community, but without a minimum 80% return rate on lending, the kecamatan was in danger of being added to the KDP blacklist. Pak Yoyo went to work.

“KDP had been running for one year, but unsuccessfully. The returns were negative,” says Pak Yoyo. “I tried to support (the program), I tried to understand what the problems were and why it hadn’t been successful.”

Pak Yoyo and the new KDP team went door-to-door in the villages to find out how the problems developed. Pak Yoyo’s position and participation gave the new KDP staff greater legitimacy in the eyes of the public and adding weight to the campaign to return the funds.

Once problems were identified, the camat’s approach to resolving the crisis was both personal and discreet. He was mindful of the need to have funds returned, of people’s limited income, and the need keep the community from fracturing.

Sub-district head Yoyo Wicahyono. His efforts to see funds returned to KDP ensured that Cikeusal had the opportunity to make a fresh start.

He began where he had the most power, in the local government. Pak Yoyo spoke to his staff and those in the village level government, arranged for repayment, and stated clearly that these practices were wrong and were not welcome under his administration.

Next, he and the KDP staff faced the difficult task of collecting from the group heads. “For a staff member, I could cut in his salary to repay the debt,” says Pak Yoyo, “but the group heads, they don’t have a stable source of income. How was I going to motivate them? I wanted them to want to repay. If not, then we would be forced to press them.” For some group heads, Pak Yoyo and the KDP staff played the strongest card they had: the potential for social sanction by the community.

Some may ask, why not prosecute the offenders in court? Pak Yoyo and the KDP staff looked toward the greater good; they wanted to solve the repayment problem swiftly so Cikeusal could still participate in KDP. Prosecution would have left the community at odds and would not have gotten the money repaid in time for Cikeusal to try again.

To reinforce the message, Pak Yoyo quietly called all parties involved to the kecamatan office on a Sunday, when no other staff would be present. A schedule was made for each person to speak with the Financial Management Unit and then the new staff and Pak Yoyo monitored their payments. Cikeusal met its repayment requirements and the staff breathed a sigh of relief.

Moving Forward

The new camat has continued to be involved. “We coordinate often, for each phase of KDP we coordinate with Pak Camat—at his request,” states the new local technical facilitator, Pak Subur. “He attends all events, different from other camats, who only send a representative. He reminds people to follow the rules and the fact that he’s present reinforces the message.”

Another benefit of Pak Yoyo’s involvement has been the willingness of village heads to help the KDP staff. Village heads are now helping socialize KDP messages and processes. Pak Jamaludin, head of the Financial Management Unit, says the village heads have been of great help in socializing the principles of the savings and loan program and, when the need arises, solving borrowing problems with village women.

Coordination with the government now extends to infrastructure projects. With high demand but only a certain level of funding, every year many villages’ projects remain unrealized. To meet this need, the KDP facilitators work with local government departments (dinas) to examine the feasibility and quality of proposed projects and add them to local budget. With the backing of the requisite government departments, these small projects have a greater chance of being approved during the district-level budgeting process.

In the future, KDP Cikeusal may get some of its operational funding in the form of a matching grant from the local government budget. They are waiting for confirmation from the district-level government but expect it to come soon.