Background

PT. Mitra Bisnis Keluarga Ventura (MBK) – which stands for “Family Business Partners” – is licensed and regulated as a non-bank finance company (NBFC) by the Capital Market and Financial Institutions Supervisory Board (BAPEPAM-LK), an autonomous agency under the Ministry of Finance. MBK’s mission is to provide working capital to low-income women in Indonesia in order to provide them access to formal financial services (financial inclusion), reduce their vulnerably, and improve their living standards. Working capital is provided to individual women through groups without guarantee. Many of the clients are landless labourers, and are involved in petty trade, preparing and selling food, livestock rearing and vegetable growing. MBK transformed itself from a foundation called “Ganesha Microfinance Foundation” at the end of 2006. This foundation operated from 2003 to 2006, and reached about 28,000 clients by end of December 2006.

Even by conservative official estimates, there are 10 million poor households in Indonesia. There are a further 10 million vulnerable self-employed households whose income hovers just above the poverty line. A World Bank poverty report on Indonesia estimated that half of the total Indonesian population of 240 million fell below the $2 dollar (purchasing power parity) poverty line in 2006.

Along with other microfinance institutions around the world, MBK believes that the availability of working capital is one of the most effective and direct weapons to fight poverty and unequal income distribution. The central assumption is that the poor have developed survival skills and are prepared to work hard. However, they have more skills and time than they can use. Also, poor people do not receive the full value of their work, because moneylenders, who often charge 5 to 10 per cent interest per month, take away a significant portion of their income. In fact, interest payments of 30 per cent per month on very small loans are not uncommon in Java.

MBK uses the Grameen Bank approach to extend working capital of US$ 100-500 to low-income women. This approach is particularly well suited to Indonesian conditions. With a total population estimated at 241 million in 2011, the work force consisted of 110 million persons. Of these, only 38 million persons (34 percent) had regular jobs (formal employment). The remaining 72 million persons (66 percent or two thirds) were either self-employed (39 percent), or working as casual and seasonal labourers in construction and agriculture (10 percent). The remaining 16 percent were unpaid family workers, usually women mostly in agriculture. Poverty in Indonesia is therefore not primarily a problem of low wages for regular employees, but of lower income for the majority of earners who find themselves in the informal sector (self-employed, casual workers and unpaid family workers). One of their major constraints for them is the lack of working capital to combine with their labour to produce higher incomes. The availability of working capital can also attract women who are housewives at present (and therefore outside the labour force), and who can productively employ a few hours every day to earn additional income for their families.

Vision, Mission and Goals

MBK’s vision is to provide access to working capital to significant numbers of low-income women in Indonesia, particularly in rural areas and small towns, in an honest, fair, timely and efficient manner.

MBK’s mission is to improve the living standards of significant numbers of the bottom 25% of households by income in Indonesia. MBK hopes to contribute to the government’s goals of meeting the Millennium Development Goals, particularly in fighting poverty and empowering women.

MBK’s medium-term goal is to reach one million clients by 2015.

An important additional objectiveof MBK is to learn best practices from leading MFIs around Asia, adapt them to Indonesia, and actively disseminate these best practices to Indonesian-based MFIs through information sharing, and network conferences and meetings.

Legal Basis

PT Mitra Bisnis Keluarga Ventura (MBK) obtained its Venture Capital operating license by from the Capital Market and Financing Institutions Supervisory Board (BAPEPAM-LK), under the Ministry of Finance in November 2006. It is in possession of the following legal documents and licenses:
1.    Articles of Association (‘Akte Pendirian Perusahan’), Ministry of Justice and Human Rights
2.    Amendment to Articles of Association to conform with New Company Act No. 40/2007
3.    Operating License (‘Izin Usaha Modal Ventura’), BAPEPAM-LK, Ministry of Finance
4.    Tax Registration (‘NPWP’), Tax Office.

As a non-bank finance company, MBK is not allowed to collect savings from its clients or from the public. As a venture capital company, it operates on a profit-sharing basis, taking risks in providing working capital to micro- and small businesses without collateral, and sharing in their profits using a pre-agreed profit sharing arrangement with its clients.