Background and Justification

The Mentawai islands Livelihood Recovery project has been implementing its programme for almost two years. ILO as one out of three UN agencies has been implementing almost all of the livelihood recovery programme from vocational training, entrepreneurship training, financial education for family training and several main activities as part of the after/post training support. Most of our beneficiaries have received the benefit of our programme and able to start up their own business. Currently they already run their motor cycle repairing business, furniture making business and light meals making business. All of their micro business need to be continuesly supported and assisted. One the important aspect for to grow their business is financial aspect. This component is one of the important aspect of sustainability.

Mentawaian society comprised of mostly agricultural societies and in the more urban areas, thriving micro-entrepeneurs trying to re-establish their livelihood from the devastating Tsunami back in 2010. Smallholder farmers and microentrepeneurs need to invest in working capitals needed for their businesses / farm output to grow. E.g. they need to invest in agricultural inputs like better seeds, fertilizers, pesticides along with farming techniques, and equally MSMEs of various sector may need to invest in more intensive technology, packaging tools and techniques, etc. What hinders them from investing for their growth, and what kinds of interventions do Small and Marginal Farmers as well as the Microentrepreneurs need?

In order to answer these questions, a Financial Landscaping Study has been conducted in July, taking respondents representing coast/forest, relocated/non-relocated, as well as urban and rural Mentawaians. Around 221 households are taken as respondents across 13 randomly selected villages, as sufficient sample size representing around 10.000 Households residing on Sipora, Pagai Utara and Pagai Selatan.

The survey captures Household profile, risk profiles, risk coping strategy taken by the household members, as well as their business profiles: what kinds of productive assets (fixed and working capital assets) they are using, what are the inputs and what type of relationship that they have built with their input suppliers as well as buyers. Apart of these individual enterprises profile, we try as well to capture the quality of social cohesion that may help buffer their exposure to many idiosyncratic risks.

The survey was conducted successfully on July and we proceed at this final stage of the project, on disseminating the survey results to pertinent stakeholders. Two level of dissemination will be carried out :

1. The 1st part of the Dissemination Workshop is targetted at stakeholders at community level, to be held in Sikakap (2 days workshop), and
2. The 2nd part of the Dissemination Workshop is targetted towards Mentawai and provincial policy-makers (1 day workshop).

Both of the dissemination workshops will comprise of :

• Seminar Session presenting the rationale of the study, methodology, and summary the findings tailored by its relevance to the audiences. Findings shared will especially highlights Financial Demand and Supply Gap :
  • Challenges from Demand side : types of risks pertained to household as well as businesses’ performances, as well as Mentawaians coping strategy.
  • Challenges from Supply side : types of risks/transactional costs incurred by local MFIs that hinders them from developing their products.
• Focus Group Discussion of several topics of the following (tentative).

Objectives

1. To align understanding and terms between stakeholders on household risks, enterprise growth, and livelihood finance.
2. To enable the Mentawaians to exert their own perspective and demand, supported by sound empirical evidences.
3. To give context, rationale of the study and to seek attention from wider (provincial) audiences on key issues faced by Mentawaians.
4. To build support among community and policy stakeholders for a wider scaling-up of the programme.