Dece Nahak, TLM Client

8/14/2019 Dece Nahak, TLM Client

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OPPORTUNITY INTERNATIONAL AUSTRALIA

TLM Community Group Progress ReportJulyDecember 2009

Dece Nahak, TLM client


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West Timor is not a typical place for microfinance toflourish: rural villages operate on largely cashlesseconomies and livelihoods are often dependant on agood harvest. However, TLMs client-focusedapproach to providing clients with effective service isnow seeing more people benefit from small loans.

From June to December 2009, TLMs active borrowersincreased by a third, from 12,270 to 16,321. Thisincluded 6,701 new group clients. The average loansize for these clients was Rp. 1,190,448 (A$142).

In 2009, TLM launched its new group loan across all19 branches, offering loans with flexible sizes andrepayment schedules.

Clients still meet weekly in groups to make loanrepayments. However, groups can be as small or aslarge as is necessary and clients are no longerrequired to co-guarantee each others loans. Thisflexible approach, with loan officers dealing with eachclient on an individual basis, means that villagers feelmore confident in applying for a loan.

In 2009, a long dry season caused failed harvests inmany areas of West Timor. As many clients work assmall-scale farmers, sell crops, or have spouses whoare agricultural labourers, this placed greater pressureon their family incomes.

2 OPPORTUNITY INTERNATIONAL AUSTRALIA - TLM Community Group Progress Report

Alfonsius storyOutside his simple concrete house, Alfonsius Taifa ishammering old tyres into chairs, buckets and pots.Alfonsius innovative business supports his wife andfive childrenIdo, Ega, Medi, Icha and Atika, agedbetween two and 11. His family relies on him togenerate enough income to meet their daily needs.

After high school, Alfonsius worked for a printing

company for seven years, which went bankrupt in1999. Fortunately, he received severance pay whichhe used to set up his tyre recycling business.

Initially, Alfonsius worked very hard to market hisproducts door-to-door and gain new customers.Despite receiving many orders, Alfonsius hadinsufficient capital to meet demand. Then he becameill and could only afford the hospital fees with thehelp of a neighbour.

In 2009, Alfonsius heard about TLM. He received aloan of Rp. 750,000 (A$89) which he used to buy rawmaterials and equipment. He buys the tyres fromrepair shops at Rp. 2,500-5,000 (A$0.30-0.60) each.Alfonsius has been able to expand his business and,with his wifes help, meet the demand for theincreasing number of orders.

Prior to joining TLM, Alfonsius earned approximatelyRp. 50,000-75,000 (A$6-9) a day. Now, his daily incomehas tripled to Rp. 150,000-200,000 ($A18-24). Alfonsiuscan now support his family and save for his childrenseducation. His greatest dream is to purchase a house,as he is currently renting.

Alfonsius hopes to further expand the business andemploy people to sell his products. Through hiscreativity and hard work, Alfonsius has used TLMssupport to create a brighter future for his family.

TLM Community Group update

Alfonsius with one of his chairs made out of discarded tyres.

Alfonius with three of his young children.

After repaying their loans, a portion of TLM clients will focus onsmall-scale farming for a period before applying for another loan.

These are considered by TLM as resting clients.

I run a welding business, and the smloan repayments have been manageab

for my income levels.Klofas Seran, TLM client


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Living in villages where infrastructure is poor, TLMclients often work together to improve theircommunitys living standards. TLM clients haverecently participated in projects funded by theIndonesian Government, including repairing roadsand building rubbish bins and rainwater receptacles.As many communities are isolated, villagers recognisethe vital importance of working together on theseprojects.

Group training TLMs Training and Transformation Unit is dedicatedto equipping clients with the skills and confidencethey need to run their businesses successfully.

The unit conducted a focus group with 46 clients inorder to identify how clients want training to bedelivered and what should be covered. The results of the focus group suggested that clients want moretraining on financial and business management, andskill-specific training related to their businesses.

Previously, basic business training was provided inshort sessions during weekly group meetings.However, this training soon became repetitive formore experienced clients. TLMs new approach is toprovide training once a month to groups of about 60clients who gather in a local church hall. This trainingcovers financial management, entrepreneurship andmarket identification. Eight branches have alreadyhosted the training, with the other 11 branchesscheduled for 2010.

Individual clients will be provided with trainingtailored to their businesses on a quarterly basis.

Introducing Community GroupsOur partners in Indonesia and the Philippines haverecently improved how they serve clients. This hasincluded a movement away from the traditional co-guarantee system to more flexible loans. This changehas been driven by client feedback and recognisesthat clients have varied financial requirements. Toreflect this fundamental change in client service,Trust Groups have been renamed CommunityGroups. This name reflects how a poor communitycan be empowered when a group of clients and theirbusinesses improve the local economy.

Environmental disaster spills over intoWest Timor The Montara oil spill in August 2009 madeheadlines around the world. Over ten weeks, 500million litres of oil spilled into the Timor Sea,creating an oil slick spanning 10,000-25,000km. ByNovember, the oil had reportedly spread to thecoastal fishing villages of West Timor, where manyfishermen found their catches, and as a result theirlivelihoods, affected.

Environmental researcher David Jones studied thearea and reported that local fishermen found deadfish in the area and as they started fishing theydiscovered their fish catch was off by 70% ormore every time they went fishing, they wereunable to produce any economic benefit and, infact, they lost money every trip.

A small proportion of TLMs clients in Kupang runsmall-scale fishing businesses. Fortunately, nonehave yet reported that their businesses have beenaffected by increased pollution. For thesefisherman, their livelihoods and families aredependant on their daily catch. TLM will continueto monitor the situation.

Sources: ABC, AFP, The World Today, The Sydney Morning Herald.


TLM Community Group update

I can save money and plan for the future. This gives me and my family greater security and certainty.

Dorce Nenobais, TLM Community Group client

TLM client Ambotuo Hasanudin fishes in the waters surroundingKupang.


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Deces story continues

On a positive note, since joining TLM Dece has savedRp. 2,500,000 (A$298). She plans to use this money toinvest in her business and her childrens education.Schooling is expensive but Dece regards it as herhighest priority.

Although Dece has faced many setbacks recently, she

is confident that with the continued support of TLMher business will prosper again and she will be able toafford care for Sandy.

Just 18 months ago, Dece was selling vegetablesfrom a roadside table, barely covering her operatingcosts with a daily income of Rp. 30,000-40,000(A$3.60-4.75). Both Dece and her business have comea long way since then. She regards her investment inher business as an investment in the future of herfamily.

Dece with her husband Fredrik and daughter Cornelia in her old kiosk in Nefonaek.

Dece Nahak is still smiling, despite facing severalhardships since the last update.

In our last report, we shared how a loan of Rp.1,000,000 (A$119) from TLM had enabled Dece tomove from selling vegetables by the side of the roadto building a small kiosk with a greater range of stock.Dece is a mother to five children and her husbandFredrik works as a driver.

The biggest trial Dece has faced is the condition of her daughter, Sandy, 13. Since a childhood illness,Sandy has suffered from severe learning difficulties.Recently her health has worsened and she droppedout of school. Sandys condition will require costlymedical treatment.

In addition, a bigger kiosk opened in Deces village,Nefonaek, which negatively impacted her business.Her daily income decreased from Rp. 90,000 (A$10.70)to Rp. 60,000 (A$7.15). Dece decided to move herkiosk to Fontein, a village about 3km from Nefonaek.

She is still establishing her presence in this area, butexpects her income will begin to increase. Decesnew kiosk is in a main thoroughfare, so she has beenable to attract many customers. She plans to startselling cooked food and mobile phone rechargecards as well.

Deces husband Fredrik is a great support to her.However, his job as a driver means that during busyperiods, he can be away for up to a month. Dece liveswith her five children and three relatives, so there arealways extra helping hands to help the children getready for school.

Dece with her youngest child, Gisela, at her new kiosk inFontein.

Dece, with bowls of cooked food to sell, in her new kiosk.


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In May 2009, TLM opened a branch on remote Sabuisland, situated approximately 175km from Kupang,the regions capital.

The Sabu branch was established in order to reachpoor communities who largely rely on subsistenceagriculture to survive. The islands remoteness anddry climate means that seasonal hunger iswidespread. There is great potential on the island foreconomic growth through small enterprises.

Sabu island has a very low population density.Electricity is only available at night to approximately60% of the population. Only 40% of the populationhas access to running water. There is one hospital onthe island and several small health clinics.

TLM faced many challenges in establishing the Sabubranch. As the local population are not welleducated, TLM ran a recruitment drive throughoutWest Timor to find suitable staff. Adverse weatherdelayed shipping to Sabu island for a period,affecting the office set up and staff placement.

There are two ways to travel from Kupang to Sabuisland: aeroplane and ferry. The aeroplane isprohibitively expensive, so TLM staff travel on theferry, which only does the 26-hour round trip twice aweek and costs Rp. 85,000 (A$10). The Sabu branchsnine employees travel back to the mainland to seetheir families four times a year. This considerablepersonal sacrifice is testament to the dedication of TLM staff.


Reaching remote communities

The Sabu branch team.

The ferry from Kupang docks at Seba Harbour on Sabuisland.

In the day to day operation of the branch, TLM staff face various difficulties. Firstly, many people on Sabuisland only speak a local language, so staff musthave a translator. Low population density and poorinfrastructure also means that reaching clients canbe time consuming.

TLM staff are also working hard to gain trust in thelocal communities. There are many money lendersoperating on the island and it will take time to build TLMs reputation as a fair and equitablemicrofinance institution.

The new Sabu branch is the latest TLM initiative tobring microfinance and support services to remoteWest Timorese communities.

Sabu island, circled, is approximately 175km from Kupang,where TLMs head office is located. Source: Multimap


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Staff profile: Shanty Kock Due to the remoteness of the communities where TLM works, and the many languages and dialectsspoken in West Timor, providing reports on TLMsprograms and clients is a challenging task. TLM staff member Shanty Kock manages the process so thatdonors can witness the impact of their support.

Shanty, 33, lives with her husband David, five-year-olddaughter Audy and mother-in-law. She loves tospend time with her family on weekends, as duringthe week her daughter is at school and her husbandalso works.

Shanty travels throughout West Timor to collectinformation on clients, interviewing them about theirbusinesses and taking photos. She will usually travel acouple of hours to reach a client, interview them forhalf an hour, then return to the office to write theirprofile. It usually takes a full day for Shanty to producea client profile written in English.

Shanty enjoys getting to know clients and learningabout their local cultures. TLM employees, like Shanty,play a vital role in sharing the good news of TLMsclients with the wider community.


Investing in people

Shanty with Zakarias, a TLM client in the cattle fattening program.

Australian Youth Ambassador Mark Peacock (second from left)

celebrating Australia Day with TLM staff in the Kupang office.

Postcard from the fieldHello Friends. Instalment number two fromKupang during my year in the field with TLM.From memory last time I checked in, I was makingmore language bloopers than George Bush on agood day, my sweat glands were in overdrive andI was planning to help TLM with improving theiraudit function as well as review and improve theirprocess manuals.

It is now (February) the middle of the rainy season.And when it rains in Kupang, it pours. For days onend. Good for the farmers. Not so good for a cityboy who loves the sun. At least the sweat glandsget a reprieve. By the time you read this, the wetseason should be behind me.

On the work front. Ive been busy here but havebeen working to a fluid workplan. Flexibility isthe key here. Most recently I have been workingwith the management team to develop TLMsthree year business plan. It has been both anexciting and difficult process. Exciting becauselooking ahead allows the team here to dream big,and imagine what kind of impact we might have if the number of families we impact in the region

increased to 25,000 then 35,000 then dreambig, 50,000 over the coming years. The potential ishuge.

Yet it has been a difficult process too. Difficultbecause, as with any organisation, particularly not-for-profits, there are limitations. Limitations due tofunding. Limitations due to an uncertainregulatory environment. Limitations due to a lack of skilled labour in parts of this poor province. Butno one said this was meant to be easy. And I amparticularly heartened that Opportunity Australiais committed to keeping supporters informed of

both the successes and the struggles. And whenall is said and done, TLM is making a hugedifference in this region of Indonesia.

The team here at TLM are terrific also. Friendly.Warm. Helpful. Full of laughs and smiles. Makesthis experience all the more enjoyable. Bring onthe next six months.

Mark Peacock Australian Youth Ambassador


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Postcard from the fieldLooking at the terrain caught me by surprisewhile preparing to land at Kupang Airport.Expecting to see lush countryside, I was taken aback when, in reality, it was rugged, dry and ratherinhospitable terrain that the West Timorese calledhome. From that moment, I better understoodconditions under which the West Timorese lived andhad to make a living.

Each day we were driven to stalls, kiosks, marketsand small businesses in Kupang or in theneighbouring countryside, to get a true picture of how small loans have been beneficial to the loanrecipients and their families. The diversity of businesses was endless.

It was an amazing experience to see just howresilient, resourceful and happy these people were.Knowing that with the help of small loans, childrenwere being given an education and a better chancein life, food was on the table, and other villagerswere being employed as small businesses grew.It was so encouraging to see how donations werebeing used again and again, with some recipientsonto their second or third loans.

For David and me, it was a truly humblingexperience to visit West Timor. The people were sohospitable and generous and we were welcomedwith open arms.

Our resolve to continue to be involved withOpportunity Australias support to West Timor hasbeen confirmed through this trip, and we wouldlove to return there in the future.

Fairlie Butterfield Opportunity Australia supporter

Active clients include all TLM Group and Individual clients.

Exchange rate used is A$1: Rp. 8,400In 2009, TLM focused on serving Group rather thanIndividual clients, resulting in a decreasing average loan sizeacross all products.TLM has implemented a series of controls to addressportfolio at risk, including a more comprehensive loanapplication and a systematic process to deal with laterepayments. As a result, portfolio at risk has decreased.Loans to women in West Timor are often signed by thehusband, hence the statistic for loans to women is lower thanthe actual.New regulations in Indonesia mean the Government will taxFoundations (like TLM) if they exceed 100% operationalsustainability. To address this, TLM is reinvesting additionalincome in community projects.

GlossaryPortfolio at risk (PAR) is a stringent measure of amicrofinance institutions loan portfolio quality. Itcalculates the total value of outstanding loan balancesfor loans with at least one payment being overdue bymore than 30 days. PAR is used to highlight potentialfuture repayment problems.

Operational sustainability is the ability of anorganisation to cover the costs of its lendingprogram with the revenue earned from its lendingprogram.

Financial sustainability is the ability of anorganisation to cover the costs of its lendingprogram with the revenue earned from its lendingprogram including the cost of its capital, inparticular inflation.

Performance indicators Jun 2009 Dec 2009 Active clients 12,270 16,321

Average loan size A$ 306 264 Portfolio (funds with clients) A$ 3,000,783 3,389,363Portfolio at risk (PAR) > 30 days 11.62% 4.34% Percentage of loans to women 46% 53%Operational sustainability 114% 100% Financial sustainability 85% 77%

Branches 19 19

Disclaimer This report provides information about Opportunity InternationalAustralias program activity. Information is provided to us by ourimplementing partners and we believe it is a true and accuratereflection of program activity at the time of writing. Programs maychange in scope or be discontinued where our core operations areno longer fulfilling the intended outcomes. In this case, Opportunity

International Australia may redirect funding to a suitable alternativeprogram.


Fairlie Butterfield with children of microfinance clients at a TLMcattle fattening station.

TLMs performance


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1. Invest in the future of microfinance Become anOpportunity Investor and walk alongside Opportunity Australia as we implementand improve services to the working poor in India,Indonesia and the Philippines.

Invest in Innovation Support OpportunityAustralias Social Performance Management program.$25,000 delivers expert consultants and practicaltools to provide more people with betteropportunities.

2. Sponsor clients in their journey outof poverty. You can sponsor 25-50 microfinance clients for$10,000. These clients will start or expand their ownsmall businesses and in doing so, bring hope to theircommunities. You can choose to support clients inIndia , Indonesia or the Philippines with life-changing loans.

3. Support the people who make

microfinance work Walking with TLM - Our partner TLM is building itscapacity to provide flexible, innovative financialservices and training to poor people in West Timor.

Double your impactPhilippines RenewalProgram - Three microfinance institutions and long-term partners of Opportunity Australia, ASKI, TSKI and TSPI, are transforming into dynamic organisationsequipped to achieve greater social impact now andin the future. AusAID will match each dollar youdonate, doubling your impact.

How do you want to

change lives?

Thank you for your generous support.

Opportunity Australia needs your help to expandour community of supporters and continuechanging lives in India, Indonesia and thePhilippines. We would like to connect with morepeople like you.

Sharing your report with family, friends andcolleagues is an easy way to increase the impact of your commitment. You can inspire others to join uson the journey as we give a hand up to those livingin poverty.

To discuss how you might share your journey withothers, contact your local Donor Relations Manageror contact us [email protected] or1800 812 164 .

More exciting opportunities tosupport clients and their families arecoming soon.

Share the journey

Microfinance can help parents give their children a chance at a brighter future.

Your support can provide the poor with enough capital to kick

start their businesses and work their way out of poverty.

Be the change you want to seein the world.

Mahatma Gandhi

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Dece Nahak, TLM Client