Bung Hatta once said that Indonesia will not shine because of the big torch in Jakarta, Indonesia will only shine because of the small candles in the village. In India, a world leader, namely Gandhi, also joked that India’s future lies in the village. Looking at the two statements of the two great figures, it is very much in line with and relevant to the third nawacita, namely building Indonesia from the village. The village is no longer a background but a front page for Indonesia’s progress. Development in Indonesia must see the village as the focus and target of development because the village is the source of the potential for the progress of the Indonesian nation.
There are two things that are the main issues of rural development in Indonesia: First, most of Indonesia’s population lives in village areas. Currently, an estimated 60 percent of the population still lives in the village; Second, the welfare of residents in villages is far behind compared to urban residents, around 63 percent of the total poor population live alone in villages (Yustika, 2015). Village development has considerable challenges because until now the number of independent villages in Indonesia is only 7.55 percent of the 74,957 villages in Indonesia.
Bali is one of the provinces that always has good and even very good report cards in the economic field. The average economic growth is always above the national one. The lowest unemployment rate is number 1 and the lowest poverty rate is number 2 in Indonesia. This is a very astonishing feat. Although in some respects it still needs to be improved, such as the level of disparity (inequality), both inequalities between regions and inequalities between sectors. Bali’s good economy is also reflected in the composition of the number of poor people in rural areas which is lower than in urban areas. Since March 2011, the number of poor people in rural areas (73.1 thousand people) is lower than that of urban areas which amount to 92.7 thousand people. The latest data is from March 2019, out of 163.85 thousand poor people in Bali, 97.98 thousand people (59.80 percent) live in urban areas while the remaining 65.87 thousand people (40.20 percent) live in villages. This condition is very different from the national condition, where the village is still characterized as a gathering place for the poor.
Tourism is a hero for the progress of Bali. Apart from the tourism sector, there are actually heroes who have contributed greatly to village communities, especially marginalized (non-bankable) communities. The hero is the Village Credit Institution (LPD). LPD is here to serve the community easily, quickly, and most importantly with simple conditions. Far different from the requirements in the banking world. This condition makes the small community in the village have friends in times of trouble. LPD is a true partner for the unbankable community. This is one of the purposes for which the LPD was founded in 1984 by Prof. Ida Bagus Mantra.
Currently, there are 1,433 LPDs in Bali. This also makes Bali an island of a thousand LPDs besides being known as the island of a thousand temples. Economically, LPD assets until the end of 2018 amounted to Rp. 21.76 trillion, disbursed loans of Rp. 418.861 trillion, raised funds in the form of savings of Rp. 8.60 trillion, and in the form of deposits of Rp. 9.61 trillion. This financial data reflects how much public trust in LPDs. Because of such great trust, LPD assets exceed the number of assets owned by Rural Banks (BPR) and savings and loan cooperatives in Bali. This is the extraordinary potential that Bali has.
Until the end of 2018, LPD profits were recorded at IDR 580.42 billion. As much as IDR 145.10 billion (25 percent) must be distributed to customary villages for both village development and social funds. The village community can use these funds to build temples, mass cremation ceremonies, mass meta tags, build banjar halls, and the like so as to reduce contributions from the village community. Reductions in village contributions can be allocated for other costs such as children’s education and health costs so that the community will be more prosperous. This means that the LPD has made a real contribution to village development in Bali. Another contribution, LPD employs nearly 8,000 employees. This means that the LPD plays a role in reducing unemployment.
The real role of the LPD will be even greater when the community supports the existence of the LPD. Community support can be carried out by utilizing the services available at the LPD. Saving, depositing money, paying for electricity, taxes, and the like as well as borrowing money at the LPD. For your information, if you deposit money at the LPD, the interest is much higher than at the bank and is not subject to tax. This means that from an economic standpoint, it is very profitable to entrust deposits in LPDs. If the entire Balinese people want to entrust financial transactions to the LPD, the Balinese people will be more prosperous.
The facts on the ground are that many from the upper middle class are reluctant or reluctant to invest money in the LPD. On the one hand, they demanded that the LPD make a real contribution to village development. If this continues to happen, there will be a coachman’s debate which in the end will not produce any changes. Let’s start by lighting a small candle instead of cursing the darkness. Many young people are indifferent to the existence of the LPD. It’s like they’re allergic to LPDs, even though they have LPDs in the village where they live. Millennials prefer to work in government offices (as temporary employees) even though the pay is much lower than working in the LPD. This condition is certainly very worrying.
The vision of the governor of Bali, namely Nangun Sat Kerthi Loka Bali, is to create a new era for Bali, one of which is to diligently invite people to love and preserve Balinese culture. LPD as one of the ancestral heritage should be maintained and preserved. It’s time for young people to start realizing its existence. The LPD must be the pride of the Balinese people. Through this article, I invite young people and the upper middle class to get to know, love, and take advantage of the services of LPD. Because of that, we have made a real contribution to the progress of the village and the progress of Bali. Hopefully, the Governor of Bali will issue an appeal to invite the Balinese to save and borrow money at the LPD as well as an appeal to preserve the Bali KB.
*Author, S1 Management Coordinator
FE Undiksha-Singaraja
