Agent of Change

Entrepreneur's Story

By: Agustinus Gius Gala

Globe Asia-15 November 2008. F.X. Bambang Ismawan, 70, has been a pioneer of the people's empowerment movement in Indonesia through the foundation he started in 1967. Since then he has helped to make social entrepreneurship a fashionable trend in national development. It operates as a foundation, is committed to building a better Indonesia, but expects to turn over Rp300 billion ($30 million) this year. It holds majority shares in more than 17 companies, benefits million of people from its activities in training, agribusiness, tourism, banking, microfinance and consulting.

The Bina Swadaya Foundation (YBS) founded by F.X. Bambang Ismawan, now 70, has become one of the largest agents of development in Indonesia, working with a range of major organizations in promoting social entrepreneurship.YBS represents the life's work of the man who walked out of Yogyakarta's University of Gajah Mada as a graduate in economics in the early sixties. Instead of going to work in government or the private sector, young Bambang chose to immerse himself in the Pancasila Movement (Gerakan Pancasila), backed by the then bishop of Semarang, the late Mgr. Albertus Soegijapranata. “I had been inspired by an old Dutch priest, Father J Dijkstra, SJ, who was working in rural areas of Java. He went into the villages, talking and motivating rural people, discussing many things about development activities,” recalls Bambang.

In 1967, together with the Pancasila Farmers Association (Ikatan Petani Pancasila), he set up YBS. With Suharto in power, Bambang followed the rules of the country's new president and aligned his new foundation with the farmer's association Suharto fostered, Himpunan Kerukunan Tani Indonesia (HKTI), which still exists today. To Bambang, what was important was to do something positive. “As a member of society, we can not just look at poverty, we cannot only ask and encourage the state to deal with it. If we can do something, we should not shout in the darkness when we could be lighting a candle,” he says. Over the years, YBS became an incubator for business and an institute of social and economic development, building social laboratories in rural areas. “This formula became a serum for development activities in Indonesia and we became involved with many government offices, helping them to design programs for community development,” says Bambang.

The foundation has worked together with the United Nations Family Program (UNFP) on the National Family Planning Coordinating Board (BKKBN) to promote small families in Indonesia by involving woman. “For almost 41 years YBS has been an agent of change for development,” Bambang says proudly. YBS's work, he believes, has contributed to the acceleration of efforts to alleviate poverty, the creation of productive employment and social integration.

Professional first

In Bambang's view, all social development activities should be run in a professional manner. For him, social entrepreneurship means social development activities which are carried out with an entrepreneurial spirit with the deployment of management and professionalism in managing the organization and its activities. “We have to be able to compete with large credit institutions, even with the large corporate groups,” he says.As a social agent, social entrepreneurship is different in many ways to individual endeavors, he believes. First, says Bambang, comes the perspective of product choice, whereby social entrepreneurship mobilizes a product not only as a means to make a profit but also as tools that can be used to empower people. An early endeavor of YBS was the publication of Trubus magazine in the early 1970s.

It didn't make a profit for 15 years but it did make many people aware of issues in the agribusiness sector. Trubus was so important as a means of spreading the message that Bambang set up a printing business to subsidize the magazine, with units including Penebar Swadaya and Puspa Swadaya. Also different is the use of profit. Unlike normal entrepreneurial endeavors where some profit legitimately goes to the entrepreneur, in this case all profit is plowed back into new business that also aims to improve development.

Vehicle for empowerment

YBS acts as an umbrella for a range of activities, controlling a majority of shares in all the companies in its stable. As an agent with a vision to empower society, YBS manages all of its business through three channels. First is product development. “We identify activities which have the potential to create popular products and work with research institutions such as the Indonesian Institute of Sciences (LIPI),” says Bambang. He notes that the researcher who cooperated with YBS in work on the buah merah (red fruit), Drs I Made Budi, became popular as a result of the program of cooperation. Buah merah itself is now recognized as a powerful herbal medicine and is producing good returns for small-scale farmers.

Trubus articles have made Adenium and Aglonema popular plants among gardeners, also creating job opportunities. All this, Bambang says, has occurred as part of the domino effect of YBS's social development programs. The foundation's second channel is institution building, through the formation of an institute of social empowerment. Bambang believed that poor people can always learn something from their friends, so through YBS he established learning centers to mobilize such grassroots resources and marketed the learning model to many parties, including government. “We train people from any organization or corporation, government as well as non-government organization.

Now all our team members or trainers are mobile, providing training in many fields in many parts of Indonesia, organized under PT Bina Sarana Swadata.”The third channel is through micro-finance support for some of an estimated 41 million micro-enterprises that exist in the country. To support this function, YBS has established four people's credit banks (Bank Perkreditan Rakyat - BPR), in Lampung, East and West Java and Banten, and established cooperatives at regency level as well as 12 dedicated micro-finance institutions. In many ways, YBS subsidiary PT Dana Mitra Swadaya, formed to control management and shares in the micro-finance business, is a home-grown Indonesian Grameen Bank, a la Bangladesh. Bambang says that 30% of profit from the micro-scale businesses goes back to YBS, 20% is set aside for employees, while the remainder is used to strengthen capital.

All the business units are controlled 100% by YBS.Bambang embraces change as a philosophy in running the organization, while maintaining the strong intention to empower people. “We are dynamic, and respond to many opportunities, but our mission to empower people is the top objective of all our activities,” he insists. And, he adds: “We also have a rule that everyone should retire when they reach 70, which means we have to prepare a succession. We also build an organization culture through embedding the values of YBS over a long period.“We set up management development programs to prepare leaders in each unit of our business.

This way we do not need to be afraid of becoming the biggest organization but losing our mission.” Since its inception in 1967 YBS has helped motivate more than 100,000 people. Soon that number could reach 1 million, all people who have received training, empowerment, micro-finance, leadership and many more services. Indirectly, as many as 10 million people have benefited from the program.

More work to do

Even though Bambang has reached the official YBS retirement age, he is not prepared to stop working just yet. Even though the foundation he started has become the largest social agency in Indonesia, he still dreams of expanding its work. “We are building networks with other organizations including at the micro-credit summit in Washington,” he notes.The foundation is active in the official micro-finance movement in Indonesia, Gema Pengembangan Keuangan Mikro (PKM). “We have had two national meetings in micro-finance and an international micro-credit summit in Bali, which successfully drew more attention from many parties,” Bambang notes.Since 1998, Bambang and his colleagues have worked to redefine the future of the organization, directing it more into an agency concerned with the development of the spirit of social entrepreneurship. “The change has not been by design but as a response to the changing environment.

So the soul of commitment to community development and the way to do it changes over time,” Bambang explains.As a pioneer, he is not worried if his model is duplicated by other organizations. “It has been our mission to help people become active in social empowerment. This is what we are, an empowering institution, an agent of change.” There is no shortage of praise for Bambang's work. Nani Zulminarni, national coordinator of PEKKA, a group that works with families headed by women, says YBS has been playing an important role in empowering people, especially the poor. “In the eighties, YBS had become a school for social organization and I was one of its students,” Nani recalls. She credits Bambang with helping to educate people to establish organizations to empower people.

As a social entrepreneur he has built wide networks across the country and run the organization professionally, creating many more social entrepreneurs. Nani believes Bambang's work should be taken further. Social entrepreneurship should become a national movement fully supported by society, she says, as long as social entrepreneurs must show that they are professional and skilled in organizational empowerment.And, she stresses, they cannot do all of this on their own. They need more supporting systems, capacity building and financial resources. “After all, they are doing the government's job for it,” she says.