Gender & Ethnicity in Indonesian Finance Institutions


A review of Gender, Ethnicity, and Infrastructure, and the Use of Financial Institutions in Kalimantan Barat, Indonesia, by Christina Dames.

In her dissertation, Christina Dames examines the use and growth of microfinancial institutions in West Kalimantan, Indonesia. The research focus on West Kalimantan is timely considering the significant performance of the microfinance institutions, primarily of credit unions, and the participation of the Dayaks in this regard. The author looks at variables such as gender, ethnicity, geographic location and development of the physical infrastructure that may influence the decision of the population to use these financial institutions.

The dissertation is organized into seven chapters. The first three chapters are the foundation for the whole dissertation. The history and development of formal and informal microfinancial institutions in West Kalimantan, and Indonesia more generally, is covered in the first chapter. This chapter also provides a quite comprehensive literature review of the concept of microfinance.

Chapter 2 details the location of the fieldwork so the reader can better picture the demography, geography, social and economic condition and development of the respondents based on where this research was conducted.

The explanation of the methodology in Chapter 3 is crucial; the author explains how the respondents were selected and the data gathered. Dames is explicit about her use of the snowballing method and only employs age as a potential criterion for exclusion. The minimum age of participation was 18 years as, at this age, the respondents are believed to be old enough to decide whether or not to participate in saving and lending programs offered by banks or credit unions.

Chapter 4 focuses on the gender factor in the use of microfinancial institutions. The author begins by examining the relevant literature on female poverty and the role of women in the economy. She then moves to look at factors which affect the role of gender in these institutions and the rotating savings and credit associations, known locally as arisan. The author shows that, despite females having been relatively disadvantaged in the past, they now have the same opportunities to continue education as their male counterparts. In several districts, the number of females enrolled in the high schools is even higher than the number of males. The Muslim females also see Islam as facilitating and even empowering their economic roles, in contrast to the views of the West which vindictively looks at Islam as oppressive vis-à-vis women. The author concludes that not only gender but also education level determines participation in formal and informal financial institutions. The more educated men and women are, the more likely they are to use all forms of financial institutions. Women, however, are more likely than men to be involved in arisan.

Chapter 5 examines the link between ethnicity and use of financial institutions. It first explores the demography, culture and other major characteristics of the three biggest ethnic groups in the province: Malays, Dayaks and Chinese. Dames finds that ethnicity has an influence on their attitude towards the choice of financial institutions. Malays are found more likely than Dayaks to use banks, but less likely than Dayaks to use credit unions and cooperatives. Also, Malays are less likely than Dayaks to borrow from a formal financial institution such as a bank or a credit union. Both ethnic groups are involved in the arisan. The other ethnic group, the Chinese, tend to use banks for financial services.

Relationships among geography, development and quality of the infrastructure and level of participation in the financial institutions are the focus of the next chapter. The author begins by citing the correlation between infrastructure of the surrounding environment and level of mobility of the population who live in the respective areas. It is believed that poor infrastructure such as damaged road networks will lead to more expensive, difficult and long travel which will negatively affect the mobility of the concerned population. It has been well established that good infrastructure is one of the prescriptions for positive developments. In this context, Dames finds that respondents who live closer to markets, towns and cities are more likely to use banks. Those who live farther away from those places tend to use credit unions. The latter, according to the author, is because of visitation service offers by credit unions. The service reduces the need for members of credit unions to travel. This also demonstrates that, even in situations where infrastructure is lacking, participation still could be high if financial service providers adjust the way their services are delivered.

Chapter 7 is a concluding chapter which summarizes all the points raised, examines policy implications, and suggests possibilities for future research.

This dissertation has contributed to the better understanding of the linkage between ethnicity, gender, religion and participation in the financial service industry and institutions in regions of Indonesia, especially in West Kalimantan. Dames’ skillful use of statistical computation to support the findings has strengthened the quality of the research. The author also has an excellent grasp of the research subject which becomes evident in her discussion of the existing literature and the ways in which she interweaves her own research.

Taufiq Tanasaldy
School of Humanities
Faculty of Arts
University of Tasmania

Primary Sources

Focus groups
Participant observation

Dissertation Information

University of Missouri – Columbia. 2012. 345 pp. Primary Advisor: Mary Shenk.


Image: Photo by Author.

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