PRODUCTS
Micro Working Capital (MWC)
MBK provides only one type of product at present, known as the basic working capital (modal kerja dasar). The first working capital size ranges from Rp 200,000 to Rp 500,000 ($22-55), to be repaid in 50 weekly instalments in weekly centre meetings. The working capital is provided to individuals at a flat interest rate of 25 percent per year, and there is no collateral. However, centre members are encouraged to provide support and assistance to others when in need.
The table below provides details of subsequent working capital size and repayments. The client’s first basic working capital is usually for Rp. 500,000. Her second working capital will amount to up to Rp. 1 million (100 percent increase), considered a viable size in terms of income generation. Subsequently the working capital ceiling of a client will grow with her performance. If her repayment record is perfect, she is entitled to a repeat working capital, which is 50 percent higher. On the other hand, for every weekly meeting that she misses without a valid reason, or if could not make her repayments on a regular basis, her ceiling will be reduced by a certain amount. The fourth and subsequent working capital size will increase by around 20 percent per year. MBK is insured against death of clients. In case of death, the unpaid portion of the working capital is written off, while MBK can claim the same amount from the insurance company.
| Working Capital Cycle | Maximum size (Rupiah) | Weekly repayments (Rupiah) | Number of weeks | Total repayment (Rupiah) | ||
| Principal | Profit-Sharing | Weekly Total | ||||
| 1 | 1,200,000 | 24,000 | 6,000 | 30,000 | 50 | 1,620,000 |
| 2 | 1,500,000 | 30,000 | 7,500 | 37,500 | 50 | 2,025,000 |
| 3 | 1,800,000 | 36,000 | 9,000 | 45,000 | 50 | 2,430,000 |
| 4 | 2,200,000 | 44,000 | 11.000 | 55,000 | 50 | 2,970,000 |
| 5 |
2,600,000 | 52,000 | 13,000 | 65,000 | 50 | 3,250,000 |
| 6 | 3,100.000 | 62,000 | 15,500 | 77,500 | 50 | 3,875,000 |
Small Business Working Capital (SBC)
In 2010-11, MBK may introduce a Small Business Working Capital product, with a size varying from Rp 5-10 million ($500-1,000 per individual client), payable in weekly instalments, to accommodate the following two types of clients who are at present not adequately served by formal banks, and who therefore rely on informal sources such as moneylenders, friends and family:
- Regular MBK clients who have taken a small working capital for several years, and who are now ready to make use of higher working capital on an individual basis without the need to attend centre meetings. Based on their history with MBK, they will not require collateral.
- Micro-enterprises and small family businesses, which are at present not served by the commercial banks. Commercial and state banks now offer loans starting at Rp 20 million ($2,000), with an average loan size easily reaching Rp 50 million ($5,000). Some Community Banks (BPR) do offer loans of this size, but with collateral and at a higher interest rate, ranging from 3-4 percent per month. These prospective clients may also not be required to present collateral.