Colleen McNally-Murphy Nanis Sakti Ningrum Rabindra Surya Sarah Smith. 06 August 2015
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1 Colleen McNally-Murphy Nanis Sakti Ningrum Rabindra Surya Sarah Smith 06 August 2015 WEBSITE kopernik.ngo FACEBOOK facebook.com/thekopernik 1
2 TABLE OF CONTENTS 1. Executive Summary 2. Methodology and Demographics 3. Resource Access 4. Income sources 5. Market Analysis (Existing Technology and Financing) 6. Opportunities 2
3 EXECUTIVE SUMMARY In the months of June, July and August 2015, four research fellows conducted primary and secondary research on livelihood mapping on three islands in East Nusa Tenggara province: East Flores, Adonara and Lembata. Research Topics INCOME SOURCES AND CYCLES Key Findings Population heavily relies on farming and agriculture as main income sources. Incomes is typically variable, not-fixed and comes from multiple sources. Inflows are linked to harvest season; outflows are linked to traditional obligations. Cultural and traditional obligations place a significant financial burden on households. EXISTING TECH MARKET Over 30% own technologies with value above $100 such as TV, fridge or washing machine. Brand and price are key consideration factors in purchasing household technologies. PURCHASE FINANCING Majority of respondents preferred paying in cash, which could reflect variable/unstable economic situation. Vendors are reluctant to use installments due to difficulty in recovering debt. Cash up front and lay-by is preferred. NEW TECH OPPORTUNITIES (New technology opportunities are not included in the abridged version of the report. There will be a separate report with technology recommendations for unmet needs. Stay tuned!) 3
4 TABLE OF CONTENTS 1. Executive Summary 2. Methodology and Demographics 3. Resource Access 4. Income sources 5. Market Analysis (Existing Technology and Financing) 6. Opportunities 4
5 SURVEY LOCATION: NUSA TENGGARA TIMUR (NTT) Survey Location Adonara Island Lembata Island Flores Island Eastern Part 3 islands 11 districts 17 villages URBAN PERI- URBAN RURAL
6 DATA COLLECTION METHODOLOGY Key Informant Interview (KII) Gov t officials, local authority figures, vendors Focus Group Discussion (FGD) (between 4-8 participants) Household Survey (HHS) (32 East Flores; 15 Adonara; 15 Lembata) % women; 44% men 84% married 58% below 50 y.o. 44% primary school 17% junior high school 23% high school 6
7 DEMOGRAPHICS Research Area Nusa Tenggara Timur (NTT) is one of the poorest and least developed provinces in Indonesia, with economic, health and social conditions below the Indonesian average. NTT includes East Flores, Lembata, Kubang, South Timor Tengah and North Timor Tengah. Regency Geography Size (ha) Pop. # of Households Male: Female Ratio # of Districts # of Villages East Flores Eastern part of Flores Island Adonara Island Solor Island 181, ,590 51, Lembata Lembata Island only 126, ,704 26, NTT ,060, ,252 7
8 DEMOGRAPHICS Economic Context 20.24% of people in NTT live below the poverty line, compared to national rate of 11.5% (2013). NTT East Flores Lembata GDP (in million) IDR 31,218,753 IDR 1,568,991 IDR 468,509 Income per Capita (yearly) Poverty Line (monthly) People Below Poverty Line Unemployment Rate IDR 6,073,871 IDR 6,279,282 IDR 3,671,132 IDR 251,080 IDR 214,010 IDR 267,510 1,006,900 people 19,600 people 29,600 people 3.25% Data not available 3.56% 8Source: NTT in Figures BPS
9 TABLE OF CONTENTS 1. Executive Summary 2. Methodology And Demographics 3. Resource Access 4. Income Sources 5. Market Analysis (Existing Technology) 6. Opportunities 9
10 RESOURCE ACCESS PLN Electricity Majority of HH respondents (45/62) were connected* to PLN electricity system. In some areas PLN was noted as unreliable in rainy season. In areas not connected to PLN power grid, access to generators was common. Households Connected* to PLN Percentage n = 62 0% 20% 40% 60% 80% 100% Rural & Peri-Urban Urban No Yes Total *Connected to PLN means 24hr access to electricity, except when there is a blackout 10
11 RESOURCE ACCESS Water Household Water Sources Multiple Answers, n = 62 Well (private & public) 12% Gallon Jug 7% Neighbors 2% Natural Spring 39% Tea-strainer style water filter Private Refill drum & tank 13% Piped (PDAM) 12% Seawater 3% River 3% Rainwater Harvest 9% 11
12 RESOURCE ACCESS Stove Use Household Stove Ownership Percentage, n = 62 44% of respondents used multiple stove types 3-Stone: Used for slow cooking, rice, boiling water Kerosene: Prevalent in urban settings Used for quick cooking, frying or baking Quick to light and heat up % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Peri-urban Rural Urban 3-Stone Kerosene Biostove
13 TABLE OF CONTENTS 1. Executive Summary 2. Methodology and Demographics 3. Resource Access 4. Income sources 5. Market Analysis (Existing Technology and Financing) 6. Opportunities 13 Research Objectives: Key economic activities and trade in the area Annual cash flow cycle of the household
14 OBJECTIVE #1: INCOME SOURCES Livelihoods & Trade The key economic activities in the area are: Plantation Farming Home Industries Services Top three commodity plantations are coconut, cashew nut and cocoa. Top three staples crops yields are corn, cassava and rice. Fishing was not a main source of income in these survey responses (consistent with secondary research) but the sea is still an important resource to the area. Trade between islands is heavily reliant on marine transportation. 14 Sources : (1) National bureau statistic. NTT in figures (2) National bureau statistic. East Flores in figures (3) National bureau statistic. Lembata in figures. 2014
15 INCOME SOURCES Primary Income Sources Household Sources of Income Percentage, n = 62 Labour 6% Kiosk owner 6% Driver 5% Pension 5% Livestock 2% Remittance 2% Farmer 31% Primary Occupations: Farmer Gov t officer Small vendor Fisherman 8% Salary worker 8% Govt. Officer 16% Three quarters of people have multiple source of income. 15 Sell prepared foods & ikat 11%
16 INCOME SOURCES Income Distribution 50% of households reported an income below 1 million IDR Household Income Percentage, n = 62 Median 0.84 Mean million IDR 16
17 Major Outflow Major inflow INCOME SOURCES Seasonal Cash Flow Calendar Cashew nut Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Coconut Cacao Candle nut Rice Fisherman Ramadhan* Sambut baru Marriage Funeral School start 17 *Ramadhan timing changes slightly every year
18 TABLE OF CONTENTS 1. Executive Summary 2. Methodology and Demographics 3. Resource Access 4. Income sources 5. Market Analysis (Existing Technology and Financing) 6. Opportunities 18 Research Objectives: Technologies available and actively sold People s decision making process in prioritizing the purchase of technologies Access to financing Common financing techniques utilized by the more successful vendors
19 MARKET Available Technologies Most common household technologies already owned (HHS): Range Household techs Number Percentage (62 HHS) $20-$40 $100+* Rice cooker 13 21% Fan % Water dispenser % Iron 8 13% TV % Fridge 5 8% Washing machine 3 4.9% *Many of the larger technology purchases were made while working overseas. 19
20 MARKET Purchasing Decision Making Purchasing Decision Percentage, n = 30 Recommendation 3% Necessity 3% Maintenance/ Spare parts 10% Price 20% Brand 44% Brand and Price were the key considerations in purchasing technologies Word of mouth was an important way that brand-knowledge or desirability was spread. Efficiency 3% Durability 17% 20
21 OBJECTIVE #2: MARKET Saving & Spending Household Reasons for Saving Percentage, n = 31 Emergencies 23%. Health 10% In preparation for funerals 6% Education 48% Education was the single most common area to which they allocated their savings. 55% of respondents were unable to save any of their income. Family 13% 45% response rate 21
22 MARKET Household Purchase Financing Preferred Payment Method Percentage, n = 27 Installment 26% Cash was the preferred payment method by households. 4 respondents reported different method for different price points. Grant 4% Price point=installment Price point=cash Cash 70% 22 HH survey respondents (44% response rate).
23 # of Households w/ Outstanding Debt MARKET Borrowing & Debt Household Outstanding Debt by Lender Percentage, n = % of respondents have outstanding debts Reasons for borrowing: Education Business start-up (i.e. kiosk) Funeral or other cultural ceremony Repayment of previous debts Challenges to borrowing: Hard to get credit without fixed income or capital Reluctant to borrow without knowing that would be able to make payments Many people wary of borrowing after recent scam 23
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