ARF’s Microfinance Update: The Story of The Trishaw Men

To date, ARF’s micro financing program has been utilized by 64 people in Punge Jurong V and beyond. With this no-interest easy credit facility, tsunami survivors have started or re-started small businesses with between US $150 and $1,500 seed money. So far, there are only three (4.76%) borrowers who have fallen behind in their repayment installments.

The businesses utilizing the financing range in scope from vegetable sellers, roadside food vendors, small convection to fabric sellers. There are also home-based bakers, teachers, and four trishaw men, two of whom are briefly chronicled here.

Abdul Mutalib: From pedaled- to machined-trishaw


Abdul Muthalib, 54, used ARF micro-credit to purchase a new trishaw.

Abdul Muthalib was a pedaled-trishaw driver living in a simple house in the Punge Jurong V neighborhood. His oldest daughter, Nilawati, 25, had given him two grandchildren while his oldest son, Nazaruddin, 23, was finishing college. The higher education of Abdul Muthalib’s two children was expected to positively affect the direction of his family life.

But the tsunami that hit Aceh on Dec 26, 2004 changed everything. Punge Jurong, one of the worst hit villages in Banda Aceh, was wiped out by the giant wave. Mr. Muthalib lost three of his five children (Nilawati, 25, Nazaruddin, 23, Darmayani, 20), his wife (Nuriah), and two grandchildren to the tsunami. He also lost his house and an old pedaled-trishaw.

After the tsunami, like many other villagers, he lived in a self set-up temporary shelter in a public building. When the villagers started going back to the village and the central market re-opened, he returned to his work as a “load-unload” laborer at the market, this time without his pedaled-trishaw. In the past, he had offered his pedaled-trishaw to deliver the goods he helped unload from inter-city trucks. Traumatized by the catastrophe, he did not want to return to living in the village yet. Instead, he resided in the second floor of a store in the central market owned by somebody he knows.


Mr. Muthalib with his new trishaw in Banda Aceh (3/22/06)

When he received a $1,500 interest free loan from ARF, he knew what he wanted. Being old and tired, he did not want to pedal another trishaw. He wanted a machine-powered trishaw. He provides for his two children who were spared by the tsunami, Saiful, 17, Mahfud, 13, and a son-in-law. The machined-trishaw is much easier to work with at his age and comes with the ability to earn a higher wage more quickly. So far, he has repaid about a quarter of what he borrowed from his village revolving credit fund sponsored by ARF.


Ismail Husen: Life is easier on the trishaw

Ismail Husen, 45, was a roadside vendor before the tsunami. He sold everything possible at the central market of Banda Aceh. A friendly man, he managed to support his family with his roadside business and rent a simple house in Punge Jurong V.

When the tsunami hit, he lost his wife, Rosana Dewi, and three daughters (Irmayana, 18, Yuni Safira, 10, Icha, 12 months). He is a beloved family man loved by his family and his neighbors for a smiling face and friendly attitude.

Despite his status as a renter, he is an active participant in all community events. He helped re-organized the villagers in their temporary shelter when they were internally displaced.


Ismail Husen, 45, on his new trishaw in Banda Aceh.

Now Mr. Husen lives in a temporary shelter with his son, M. Fajar, 14, who survived the collapse of the old community center in the village during the tsunami. Everyday, Mr. Husen works around Banda Aceh central market transporting people who need easy, affordable, yet fairly comfortable transportation from the market to their residences. His friendly attitude is definitely a great advantage in attracting more customers.

[Posted: 01/09/2006]
ARF currently support 23 small business operated by victims of the tsunami in Banda Aceh. The Micro finance (also known as Easy Credit Facility) is available to adult tsunami victims in Banda Aceh. Priorities are given to victims with experience in operating small businesses prior to the tsunami.

ARF hopes that eventually these victims (as a result of using credit to re-establish/establish small businesses) will be able to provide employment opportunities to other victims. Other victims who do not have experience operating small businesses but can demonstrate seriousness and soundness of plan will also be considered as recipients of the Easy Credit Facility.

However, due to current limitations, only villagers from the village of Punge Juriong will have access to the facility. Prior to the tsunami, majority of the villagers in Punge Jurong work as small traders in the local market. Many own small shop or roadside stall in Banda Aceh. ARF hopes to expand the credit service to other villages if and when adequate funding can be procured for such an operation.

The loans are given in the amount ranging from USD $100 to USD $1000, depending on the type and size of the proposed business.The length of the loan is two (2) years. At the end of this period, the principal is due in full.

The loans are provided interest free to the tsunami victims. The grantees are expected to return the principal loan amount, so that the money can be utilized by other victims (hence the name Revolving Easy Credit Facility). However, they will have to pay a minimal service charge that will be used to pay the agency that will be running the credit facility on behalf of ARF.

ARF act through YMI to ensure fairness in the distribution of the funding. ARF, YMI, and the Village Committee have had several meetings to discuss the proper distribution of the loan. It is agreed that, tsunami victims interested to participate in the scheme is required to submit a simple written business proposal. They can seek the assistance of local NGOs to help articulate their business ideas into a written form. As explained earlier, YMI and the village community will act as a clearing house for the application. Potential loan recipients will be interviewed to determine their seriousness and readiness to restart old or begin a new re. YMI and the Village Committee will serve as a clearinghouse that will advice ARF on their selection which will then be forwarded to BCC.