Recycle Waste Savings Product from Indonesia

Our business idea for the Islamic Microfinance Challenge 2010 was to mobilize savings using a Recycled Waste Savings Product. The project was designed to address pollution and waste management issues in the capital city of Bandung, in the West Java province of Indonesia. Approximately 2,000 tons of waste is collected on a daily basis in the city alone.

We at BISMA feel that microfinance institutions (MFIs) can participate in solving this problem by mobilizing savings in the community through waste collection. Our idea is that MFIs collect waste from community members, and pay for the waste collected. However, instead of paying for it with cash, MFIs will open a savings account for each student or community member who has collected the waste. The collected waste will then be sold to either a waste power plant or the city’s waste recycling company.

The project will focus on students in particular, since we feel it is easier to motivate youth. We anticipate that this will trigger a widespread movement to engage the larger community. Moreover, this project does not require any large capital to start.

Through this initiative, three parties benefit directly. The community finds a solution to the waste problem, volunteers gain access to a unique savings mechanism, and the waste recycling company improves efficiency by collecting waste directly from the MFIs, instead of having to go door to door.

MFIs need to promote this program by providing waste management and environment education and awareness to students or community members so that they understand the importance of keeping the city waste-free. This project is poised to become self-sustainable due to this win-win situation for community members, volunteers, and waste recycling companies. After five years, we expect that MFIs can add other products to their portfolio, using profits from the previous years.

Since Indonesia faces a similar waste management problem in most provinces, it is reasonable to expect that either through MFIs, or through creating a specific Waste Bank (Bank Sampah), the notion of mobilizing savings through waste collection can become popular. National awareness and promotion of implementing institutions will be crucial for the success of this project.