Social Enterprise and Village Development Directorate General of Rural Development

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1 Social Enterprise and Village Development Directorate General of Rural Development Ministry of Village, Disadvantaged Area and Transmigration of Indonesia

2 OUTLINE Social Enterprise and Poverty Social Enterprise in Indonesia Village Own Enterprise and Poverty in Village Village Fund Governance

3 Tahunan Tahunan Tahunan Tahunan Tahunan Maret September Maret September Maret September Maret September Maret September Maret Social Enterprise and Poverty Poverty in Indonesia (%) Poverty and inequality is a shared responsibility between government, private and community. There are gaps in service delivery from government that affect to public goods, such as social, educational, and health services, high unemployment rates contributed to weak social cohesion and poverty Inequality shows that local problems cannot be efficiently and effectively tackled by public or government Social Enterprises provide an innovative approach and are effective as poverty reduction (UNDP, 2008)

4 Cont The Role of Social Enterprise to Reduce Poverty (Sirjabat, 2015): Access to Financial Resources Grameen Bank in Bangladesh play an important role to reduce poverty Social Enterprise Social Innovation Kiva Foundation success using social innovation to help the poor in US. They build connections between individuals with technology and internet to drive micro financing network People Empowerment Empowerment is a significant aspect of social entrepreneurships because social entrepreneurs have limited access to resources when addressing social problems. Job Creation Social enterprise create jobs and integrate the poor into available jobs outside the competitive labor market Economics Opportunity Poverty Reduction

5 Social Enterprise in Indonesia 3 Categories of Social Enterprise in Indonesia (UNDP, 2016) Un-fundable Potential to be Funded There are NGOs and Small Business Estimated about 70% of total companies Companies that led by strong founders Estimated about 20% of total companies Investment Ready Estimated about 10% of total companies

6 Cont Sector domination of social enterprise in Indonesia (UNDP, 2016): Maturity of social enterprise in Indonesia (UNDP, 2016): Agriculture Financial Services Healthcare (55%) (20%) (10%) Education (10%) Fishery/Aquaculture (5%) Technology Based (Growing number) Young social enterprises 80% Product market fit 70% Early-stage Growing number

7 Cont In Indonesia, social entrepreneurs are growing rapidly, many people belief that social entrepreneurship can solve social problems (Utomo, 2014). Basic concepts of social entrepreneurship, such as innovation, opportunityoriented (opportunity seeker), visionary, etc. to be implemented within the framework of social activities in this companies (Firdaus, 2014) Firdaus, 2014

8 Benefit of Village Own Enterprise (BUMDesa) and Poverty Reduction in Village Job creation Village Own Enterprises Empowerment community Social Enterpris e Aspect Support of innovation for village product Poverty Reduction Increasing value add for village product increasing of community income

9 Priority Sector of Village Own Enterprises (BUMDesa) NATURAL RESOURCES MANAGEMNET Managing and utilizing natural resources in the village, as a form of embodiment of the constitution that Natural Resources is controlled and managed for the greatest prosperity of the people PROCESSED ECONOMY BASED ON LOCAL RESOURCES Processing innovation is developed in every product managed by BUMDesa so that added value can be generated and not out of the village economic circle DISTRIBUTION NETWORK BUMDes is expected to become a distributor of products produced by the Village, shorten supply chain FINANCE SECTOR The limited range of Banking to target all villages in Indonesia is an opportunity for BUMDesa to mobilize the financial sector and equity capital for the community. Through this sector Productivity of rural communities can be improved PUBLIC SERVICES Public service sectors such as Education, Health or transportation can be a strategic business opportunity BUMDesa in the effort welfare of the village community widely

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11 Village Own Enterprise Coorporates There are 196 Village own Enterprise Corporate in Sumatra, Java and Bali, Borneo and Sulawesi

12 Measuring the Success of Village Own Enterprises Economy Aspect Revenue Profit Capital Market share Social Aspect Job Creation Community Accessibility for: Finance access Public services access, such as health facility, education, etc Community Empowerment

13 Village Own Enterprises and Cooperative Village Own enterprise is more inclusive than cooperative: Cooperative is a democratic economic institution that benefits its members both at the village and wider levels Village Own enterprise is a democratic economic institutions that benefit all village community BUMDesa Benefit oriented Village potential management No membership, more prioritize benefit for village community, social entrepreneurship approach Cooperative Profit oriented for the member Fund member management there are membership, prioritizing profit to be shared on members, business approach

14 FISCAL POLICY FOR THE VILLAGE Fiscal Policy for The Village Realization ,72% Village Fund Realization ,65% 2015 Rp 20,7 billion (for village) 2016 Rp 46,9 billion (for village) 2017 Rp 60 billion (for village)

15 Village Fund Governance Utilization of Village Funds using Empowerment approach Village funds are used to strengthen village literacy on development Village Fund for Strengthening Human Resources Capacity Strengthening community participation in monitoring, as well as paralegals Involving legal institutions in village development literacy through village funds The definitive designation of the Village Fund monitoring authority

16 COMMUNITY EMPOWERMENT THROUGH VILLAGE FUNDS Village Fund INCREASING CAPACITY & CAPABILITY OF VILLAGE PEOPLE EXPECTED ACHIEVMENTS INCREASING INNOVATION, AWARENESS AND PARTICIPATION OF VILLAGE COMMUNITIES IN DEVELOPMENT Community Fasilitator OPTIMIZING UTILIZATION OF SUSTAINABLE ASSETS OF VILLAGES

17 Village Fund Achievements for 2 Years The rise of MUSDES activities and community participation from planning to execution of development Budget transparency becomes a new necessity as part of the accountability of village governance Self-help and mutual assistance are increasing, since all programs must be run on a self-managed basis The cost of development becomes very cheap because it is done by the villagers in the spirit of enthusiasm without sacrificing quality 5 The emergence of various efforts to strengthen the capacity of citizens and sustainable empowerment with local cultural and knowledge base

18 VILLAGE FUND FOR VILLAGE OWN ENTERPRISES CAPITAL Village Development Empowernment Community To improve the welfare of the village community and the quality of human life and poverty alleviation to increase the capacity and capability of the village community by utilizing its own resources and resources so that the village can support itself independently. TRAINING SKILL AND ENTREPRENEURSHIP DEVELOPMENT OF TOOLS AND PRODUCTION FACILITIES should consider Village typology Sumber: Permendesa No. 21/2015 tentang Penetapan Prioritas Penggunaan Dana Desa Tahun 2016

19 VILLAGE FUND MONITORING Socialization of village funding schemes Kemenkeu Training and consultation on village financial management BPKP Strengthening the capacity of villages in the framework of village governance (good governance) Kemendagri Capacity building of village facilitators in village financial management Kemendesa Provide input / input to the community and village government related to the allocation of village funds Pendamping Desa Synchronization between RPJMDes with RKPDes and APBDes Masyarakat Desa Development of Village Finance & Simple Application guidelines (Siskeudes) BPKP TAHAPAN : Mitigasi Perencanaan Pelaksanaan Monev Tindak lanjut Ensure community participation and control in every stage of planning, implementation, and monitoring of the budget Pendamping Desa Ensure processes related to the functions and duties of Kemendagri, Kemendesa PDTT, Kemenkeu, Local Government and Village Governance to manage the village funds well Itjen Masing-masing Kementerian, BPKP dan APIP Supervision of the process of using village funds in accordance with the provisions of regulations and legislation Pendamping Desa dan Masy. Desa Complaints about the use of village funds through the complaint center and the handling of the problem (crisis center Kemendes PDTT) atau website LAPOR!!!Kantor Sekretariat Presiden Masyarakat Desa investigate the misuse of village funds to realize transparent and accountable village fund management KPK To enforce the law to perpetrators who abuse village funds Kepolisian RI dan Kejaksaan Tinggi MANAGEMENT OF TRANSPARENT AND ACCOUNTABLE VILLAGES FUND

20 UNIVERSITY ROLE FOR VILLAGE FUND Coaching or training the village apparatus in the management of village funds Academics from the university can provide training and guidance on how to manage village funds effectively for development and empowerment Devotion to the village community in terms of development and empowerment through village funds One of the academics responsibility is the dedication to society, in this case do the devotion to the village community Facilitator in the use of village funds that are more transparent and accountable Assist villagers in managing village funds to be accountable and transparent

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