Poverty Reduction through Community Economic Empowerment Program in Jakarta: A Study of Factors Influencing the Repayment of Revolving Fund

Poverty in Jakarta is the highest in the past years. The Sub-district Community Economic Empowerment Program (Program Pemberdayaan Ekonomi Masyarakat Kelurahan/PEMK) as one of the ways to reduce poverty. It is one of the poverty reduction program for low-income people who have micro and small enterprise in Jakarta. It is carried out by the Revolving Fund Management Unit (Unit Pengelola Dana Bergulir/UPDB) in partnership with the Cooperative Financial Services (Koperasi jasa Keuangan/KJK) in each sub-district. However, the implementation of the program is not without challenges. One of the most significant challenges are the maintenance of the revolving fund. This study examines the factors influencing the regular or irregularity of repayment of revolving fund in KJK to UPDB. Using the Green and Haines framework of Asset-Based Community Development, three factors emerge as most significant in this study. They are social capital, financial capital and human capital. Based on this, I would like to argue that economic development has to be paired with social development before successful poverty reduction can take place.