Savings groups help Indonesia villagers manage finances, voice their opinions
Date:
Authors: Mutia Salma, Orissa Sofyan, and Vania Ramadhanty
Oetuke, Timor Tengah Selatan Regency, Indonesia — The village savings and loan association (VSLA), a microfinance group that helps women in Oetuke Village to manage finances and rebuild social cohesion after a landslide destroyed homes and the village hall in 2021.
The association has a core membership of 24 women, and is designed to help them build resilience, especially in crises such as natural disaster, illness, death, crop failure or job loss.
Men are welcome to join, but most current members are women, who are typically expected to manage the household finances. Members pay a nominal administration fee to join and put their savings into the collective fund on the 15th of every month. They can take interest-free loans from the fund, to be repaid on a schedule – often 1-3 months depending on the amount and the borrower’s income – that is agreed to at an association meeting.
Juridna L. Bahan, the head of the association in Oetuke, said that while conventional savings and loan schemes “give money first and we return it, with the association we save up first, then loan”. It also helps them to steer clear of debt collectors.
She said the association “helps me prepare for urgent needs such as illness, hospital bills, medication or school supplies. It teaches us to spend wisely, rather than buying things we don’t really need, so I rarely go to the market to buy unnecessary items, only what the household needs.”
UN Women, together with Save the Children and the non-profit CIS Timor established the association, called New Life Group (Kelompok Hidup Baru), in February 2025 as part of WE NEXUS, a project funded by Korea International Cooperation Agency (KOICA). The project focuses on preventing violent extremism, reducing disaster risk, strengthening resilience, and protecting and empowering women and children.
There is one village savings and loan association in each of the seven project villages in Kupang District and Timor Tengah Seiatan Regency, in East Nusa Tenggara Province.
The associations have not only helped members strengthen financial planning but also their confidence to participate in public forums and village governance.
At each association meeting, members discuss the purpose of the association, good financial management, and personal or household financial challenges – all the while strengthening trust and solidarity among members.
“I now see the mama-mama (mothers) raising their hands to speak up in our gatherings, and it’s heartwarming to see them confidently sharing their opinions,” Juridna said.
Another member of the association, Milka Yosina Feo, 34, said that they need funding support to buy threads or commodities to weave fabric and restock kiosks to generate income when their main livelihood, gathering coloured stones along the coast to be sold for decorative purposes, is curtailed by the big waves of the rainy season.
To sustain the village savings and loan association and expand opportunities for women entrepreneurs, the village government has provided financial support of 5 million Indonesian Rupiah (about USD 307).
Juridna said that with continued encouragement, the group can complete its first savings cycle and welcome more members in the future.
“When I see the happy faces of mama-mama who are part of the village savings and loan association, I feel proud,” she said.