Poor In­done­sians change trash for cash, and find a way to save

▶ ▶ In­done­sia’s “trash banks” pro­vide cash and ba­sic sav­ings ac­counts for the poor ▶ ▶ “They just need to bring in more rub­bish, which, af­ter all, is ev­ery­where”

Bloomberg Businessweek (North America) - - Contents - �Chris Brum­mitt

It’s clear from the dirt floor, the bat­tered green sofa, and the com­mon-use comb hang­ing from a string next to the door that this is no or­di­nary bank. Cus­tomers in this poor cor­ner of eastern In­done­sia can bor­row cash— and pay back in trash.

“The pro­gram orig­i­nated from the peo­ple, it is man­aged by the peo­ple, and the re­wards are for the peo­ple,” says bank man­ager Suryana, who wears a black head­scarf. She lives with her fam­ily above the Mu­tiara Trash Bank in the fast-grow­ing city of Makas­sar on the is­land of Su­lawesi. “From an eco­nomic point of view, this gets re­sults,” says Suryana, who like many In­done­sians goes by only one name.

In In­done­sia, trash bank­ing has emerged as a way of re­duc­ing pres­sure on ever- grow­ing land­fill sites, while al­low­ing some of the coun­try’s poor­est cit­i­zens ac­cess to ba­sic sav­ings and credit. Res­i­dents bring re­cy­clable trash such as plas­tic bot­tles, pa­per, and pack­ag­ing to the col­lec­tion points, known as banks, where the rub­bish is weighed and given a mon­e­tary value. As at a reg­u­lar bank, cus­tomers are able to open ac­counts, make de­posits of trash— con­verted to its cash value—and pe­ri­od­i­cally with­draw funds.

In Makas­sar, the city gov­ern­ment com­mits to pur­chas­ing the rub­bish at set prices dis­played at the bank, en­sur­ing price sta­bil­ity for those bring­ing in trash. It then sells it to waste mer­chants who ship it to plas­tic and pa­per mills on the main is­land of Java.

Cus­tomers, most of whom are women col­lect­ing trash part time, typ­i­cally save tiny amounts in their ac­counts, around 2,000 ru­piah to 3,000 ru­piah (15¢ to 22¢) a week, al­though those who spend more time col­lect­ing rub­bish can save much more. The banks also al­low them to bor­row money, most of­ten to buy rice to­ward the end of the week as fam­i­lies await pay­checks from em­ploy­ers.

Bor­row­ers pay

back re­li­ably. “So long as the peo­ple are still liv­ing here, they will pay,” says Suryana, who has learned book­keep­ing and man­age­ment skills for her role at the bank. “They just need to bring in more rub­bish, which, af­ter all, is ev­ery­where.”

The scale of the trash prob­lem fac­ing Makas­sar is clear from a trip to the land­fill on the edge of town. Each day the city of 2.5 mil­lion pro­duces 800 tons of rub­bish, most of it end­ing up at the five-story-high pile, which sprawls over an area the size of two soc­cer fields. Scavengers, many of them chil­dren, work along­side cows for­ag­ing for food. About 70 per­cent of In­done­sia’s trash is dumped in open land­fills, ac­cord­ing to the Min­istry of En­vi­ron­ment and Forestry.

Mu­tiara is one of more than 200 trash banks in Makas­sar. In­done­sia as a whole last year had 2,800 trash banks op­er­at­ing in 129 cities, with 175,000 ac­count hold­ers, ac­cord­ing to the En­vi­ron­ment Min­istry. The banks can do more than pay out cash. Mu­tiara Trash Bank has paid lo­cal stu­dents to help younger kids with their home­work. Else­where in the coun­try, ac­count hold­ers can ex­change rub­bish di­rectly for rice or phone cards, or use it to pay their elec­tric­ity bills.

For cus­tomers such as Siti­nah, who runs a small shop just down the al­ley from the bank, it’s the clos­est thing they have to a fi­nan­cial in­sti­tu­tion. “Be­fore, I never seemed to have any money,” she says af­ter with­draw­ing 50,000 ru­piah to buy a wok she plans to use in a home cater­ing busi­ness. “Now I can dip into these sav­ings when I need to.”

The city ad­min­is­tra­tion sends trucks to col­lect the waste from the Mu­tiara Trash Bank sev­eral times a week and brings it to a Cen­tral Trash Bank, where it’s sorted for sale. “It’s a sim­ple idea and a good one,” says Ary Bu­dianto, a busi­ness­man who buys sev­eral tons of trash from the cen­tral bank each month. “By in­ter­ven­ing in the mar­ket, the city en­sures col­lec­tors get a sta­ble price. The qual­ity here is good, and they don’t cheat you at the weigh-in.”

For trash bank­ing to suc­ceed, gov­ern­ment sup­port is vi­tal, says San­jay Gupta, a waste man­age­ment spe­cial­ist at Skat Con­sult­ing in Switzer­land, who’s stud­ied the projects in In­done­sia and else­where. The banks “need land and struc­tures,” he says. “You can’t run them in the open.” While In­done­sia has the largest net­work of trash banks, says Gupta, sim­i­lar prac­tices are car­ried out in African coun­tries in­clud­ing Ghana and South Africa, in the In­dian cities of Pune and Ben­galuru, and in Manila and Bo­gotá.

The au­thor­i­ties in Makas­sar are sup­ported by a lo­cal non­govern­men­tal or­ga­ni­za­tion that re­ceives fund­ing from Unilever In­done­sia and is headed by Sa­harud­din Rid­wan, a for­mer TV jour­nal­ist. “We must all take re­spon­si­bil­ity for rub­bish,” says Rid­wan.

The bot­tom line In­done­sia’s 2,800 trash banks of­fer their 175,000 mostly poor ac­count hold­ers a way to build up small amounts of cash.

15¢ 22¢ Cus­tomers typ­i­cally save to in their ac­counts ev­ery week

800 Makas­sar pro­duce­s­tons of rub­bish ev­ery day

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