Fighting poverty via the cell phone
Brea Olivia Salim
The penchant of Indonesians for chatting on their mobile phones is well known. A new initiative by two social entrepreneurs working together with Grameen Foundation is helping thousands of rural women call their way out of poverty.
The green leaves of the papaya trees just across from Ibu Sulasmi’s warung sway in the wind, as Budi quietly climbs one of the trees. He plucks a papaya and jumps down with a smile. “My wife will be so happy with this papaya,” he mutters to himself, as he takes his cell phone out of his pocket.
But then Budi realizes – he has no phone credit, or pulsa. Anxious, he hollers across the road for the stall owner to send him some pulsa. He rushes to the stall as Sulasmi takes her red Esia cellphone out. She punches in some keys and voila! The pulsa is sent immediately to Budi’s phone.
How does Sulasmi do this so easily? The answer consists of four words – RUMA (Rekan Usaha Mikro Anda – your micro-business partner) – whose banner is hanging above Sulasmi’s head.
The stall owner was approached in December 2009 by one of RUMA’s field officers, who gave her an offer she couldn’t refuse. “She told me she could teach me how to isi pulsa (store phone credit) through my phone,” Sulasmi recalls with a smile.
“I was really interested and decided I wanted to know more.” Sulasmi agreed to buy a RUMA box at a cost of Rp100,000 which contains a promotional banner and an operating manual, in addition to a free tutorial from a RUMA field officer.
Using Sulasmi’s own cell phone, the RUMA field officer guided Sulasmi, showing her how to text RUMA’s server asking for pulsa, and how to send pulsa to her customers. After about a week, Sulasmi officially started her side business, selling phone credit to customers at her stall.
If Sulasmi had wanted to start a pulsa business on her own, she would have had to deposit Rp100,000 with each telecom provider. RUMA, on the other hand, made it much easier.
“RUMA gives franchisees marketing materials, training in business operations, mentoring services and working capital loans,” explains Thilma Komaling, RUMA’s business development and human capital manager.
“With an established brand, training, and necessary technology, these micro-franchisees can immediately start selling airtime, or pulsa, to members of their community using their mobile phone as a transaction tool.”
Out of 240 million Indonesians, 75% live below $2.50 a day.
Two-thirds have mobile phones and 90% buy prepaid phone credit instead of paying a monthly bill. However, it costs a villager Rp2,000 to travel to the city to buy Rp5,000 worth of pulsa, since it is hard to find a sales point in the village. So how is Sulasmi able to sell her pulsa, when she is in the middle of nowhere?
Realizing the increasing demands for phone credit in rural areas, Qualcomm, Bakrie Telecom and Grameen Foundation decided to collaborate to offer telecom services to the poor in 2008. Entrepreneurs Aldi Haryopratomo and Budiman Wikarsa also saw the increasing demand as a great chance to create a micro-enterprise opportunity.
In 2009, Aldi and Budiman founded RUMA, a for-profit social enterprise incubated by Grameen Foundation, later incorporated into the partnership.
RUMA’s first business solution is Ruma-isi-ulang – business in a box. A box costs Rp100,000, contains promotional banners and an operating manual, and comes with a tutorial on how to sell pulsa from your phone from RUMA’s field officers.
RUMA regularly buys pulsa from the 10 telecom operators in Indonesia at a discount price, enabling RUMA’s micro entrepreneurs, or Village Phone Operators (VPOs), to make a small margin of profit. After about a week, the VPO starts to sell pulsa through his or her phone, sent from RUMA’s server through text, then to the VPO’s customer, through text as well.
Sulasmi’s extra income (Rp15,000 on a good day – about $1.70) may seem small. Yet in a community where every cent counts, even this small bonus has helped Sulasmi’s main business.
Soon after Sulasmi joined RUMA, she was able to buy a new refrigerator to store cold drinks for the warung. Sulasmi earns only about Rp30,000–Rp40,000 per day from her warung, which has also seen more business since Sulasmi joined RUMA. “Ever since I started selling pulsa, more and more people have come to my warung to buy my food,” Sulasmi says.
The Grameen experience
Just as Sulasmi’s tiny bonus helped her with her main business, so did Muhammad Yunus’ first loan to the 42 women of Jobra Village, Bangladesh in 1976. Yunus had discovered that his tiny loan was sufficient to start a business.
Over a span of five years, his 42 customers grew to 28,000. In 1983, Yunus finally opened Grameen Bank, an official bank that gave out loans much smaller than other banks would. With time, Yunus’ work spread in other developing countries in Asia and Africa, including Indonesia.
Currently, RUMA has 8,300 VPOs in six cities around the Jakarta area – an impressive number for a recently founded organization. Of the members, 90% are women, who usually already have a main business such as a warung, where they can sell pulsa as a side business.
Thilma Komaling describes RUMA’s focus target for VPOs as “female, aged 16-55, aware of technology, able to operate mobile devices, and living below the poverty line around the area of our branches.”
So, how does one exactly measure poverty? The answer: The PPI, or the Progress out of Poverty Index. A Grameen Foundation initiative, PPI is a questionnaire designed to best determine a VPO’s needs in order to move out of poverty as fast as possible.
Currently, 61% of RUMA’s VPOs are in the category ‘likelihood of poverty’ as they live on Rp25,000 a day. A further 9.4% live on Rp12,500 a day, falling into the category of ‘likelihood of absolute poverty.’
While RUMA’s phone credit program has proven to be a success – a VPO’s income usually increases by an average of Rp100,000 per month, if not more – RUMA aspires to do more to empower the poor in Indonesia.
“Our goals in the future are to strengthen our current network and develop more services that can help the more productive poor to be empowered, so their quality of life can be improved,” says Thilma.
This leads to RUMA’s second project – Usahaku (My Business). This is an application available in C-52 and C-55 Esia phones, and boasts the Jual Pulsa (selling phone credit) feature, which allows cell phone users to sell pulsa from their phones free of charge.
Another noteworthy feature is Info Kerja, a hub of information listing job vacancies in Jakarta and surrounding areas. In creating Usahaku, RUMA collaborated with Qualcomm and Bakrie Telecom.
Having achieved all this in the short span of two years, working in RUMA has not been easy, according to Thilma. “Being a social enterprise at its early stage, RUMA still needs substantial investment to scale up. For instance, getting social investors is challenging,” she says. “But we believe there is huge potential out there.”
Thilma notes the need to make profit as a social enterprise, since RUMA is not a charity. “RUMA’s management continues to maintain its discipline while working with the poor, which is not the most profitable sector at the moment,” she notes.
“But, we believe that with strong commitment, our company value will definitely increase, albeit slowly.” Fortunately, RUMA’s great work has not gone unnoticed, especially overseas. In 2010, RUMA won first place in the Pitch for Change category in the annual Harvard Social Enterprise Conference. RUMA also won second place in the Global Social Venture Competition that same year.
To end this story, look at the inspiring tale of Ibu Umi, a widow who lives in Bekasi, a Jakarta satellite in West Java. Four years ago, Umi’s husband passed away, leaving her alone to deal with mountains of debt. Her house was repossessed, leaving her no money to travel back home to live with her family.
“I really had nothing for myself. I didn’t know what to do,” Umi says, sighing as she recalls the past. Yet, Umi didn’t give up. She set up a warung, selling coffee and cold drinks, but her income was not enough to support her.
Then, Umi learned about RUMA. “When Ibu Ani (a RUMA field officer) approached me, I didn’t even know what a cell phone was,” Umi reminisces. “I just knew it could be used to communicate with my family in Central Java.”
Ani, who is now the branch head for RUMA in Bekasi, not only taught Umi how to work through her phone, but how to sell pulsa as well. Presently, Umi makes an impressive Rp200,000 a week from selling pulsa, an impressive amount for any VPO.
Umi has been using her extra income to sustain her warung and even to create a chicken farming business. “I would like to thank Ani for all her help,” Umi says. “She is a good mentor and friend.” Ani still visits Umi regularly, checking how Umi’s business is doing. Their relationship has developed beyond just doing business together to become a friendship.
Hearing stories like Umi’s at RUMA is the best part of Thilma’s job. “I love seeing our clients grow, moving them up the poverty line, while also witnessing our staff develop, from being field officer to branch head,” she says.
“It is really an outstanding feeling that your work can actually empower people to achieve their best, while at the same time you are living out your passion in eradicating poverty, one VPO at a time.” GA