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Local wisdom in rural microfinance: a descriptive study on villagers of East Sumba

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  • Like Soegiono

    (Satya Wacana Christian University, Indonesia)

  • Apriani Dorkas Rambu Atahau

    (Satya Wacana Christian University, Indonesia)

  • Harijono

    (Satya Wacana Christian University, Indonesia)

  • Andrian Dolfriandra Huruta

    (Satya Wacana Christian University, Indonesia)

Abstract

Developing microfinance in rural areas by considering local wisdom in Sumba-island becomes an urgent issue due to limited access to formal financial services experienced by the majority of the villagers. This study aims at describing the forms of local wisdom in rural microfinance to overcome problems of access to financial services. This is in line with the government program of financial inclusion for villagers in the remote area. This study uses the qualitative method in the form of a case study in Mbatakapidu village in East Sumba region. Data was collected through observation and focus group discussion with community leaders and several non-government organizations. The findings show the existence of local wisdom in saving and investing by the villagers to overcome the limited access to formal financial services. In addition, there is evidence of village development using a bottom-up approach by considering the local wisdom to reduce poverty through microfinance development. Thus, culture-led development might be an alternative policy for the local government in developing microfinance.

Suggested Citation

  • Like Soegiono & Apriani Dorkas Rambu Atahau & Harijono & Andrian Dolfriandra Huruta, 2019. "Local wisdom in rural microfinance: a descriptive study on villagers of East Sumba," Entrepreneurship and Sustainability Issues, VsI Entrepreneurship and Sustainability Center, vol. 6(3), pages 1485-1496, March.
    • Handle: RePEc:ssi:jouesi:v:6:y:2019:i:3:p:1485-1496
    DOI: 10.9770/jesi.2019.6.3(30)
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    References listed on IDEAS

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    1. Marion Allet & Marek Hudon, 2015. "Green Microfinance: Characteristics of Microfinance Institutions Involved in Environmental Management," Journal of Business Ethics, Springer, vol. 126(3), pages 395-414, February.
    2. Benjamin Feigenberg & Erica Field & Rohini Pande, 2013. "The Economic Returns to Social Interaction: Experimental Evidence from Microfinance," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(4), pages 1459-1483.
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    Cited by:

    1. Cheng-Wen Lee & Andrian Dolfriandra Huruta, 2022. "Green Microfinance and Women’s Empowerment: Why Does Financial Literacy Matter?," Sustainability, MDPI, vol. 14(5), pages 1-13, March.

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    More about this item

    Keywords

    microfinance; local wisdom; sustainable development; Sumba;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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