The researcher will identify how cultures in the abovementioned research areas are inextricably intertwined in society and will indicate how far cultural dimensions influence economic behavior.338 There is controversy surrounding the role of culture in economics. Modern neoclassical economics tends to downplay the importance of culture to economic growth. For example, Robert
336 Keputusan Menteri Koordinator Bidang Kesejahteraan Rakyat no. 25/KEP/MENKO/KESRA/VII/ 2007 tentang Pedoman Umum Program Nasional Pemberdayaan Masyarakat Mandiri, (PNPM MANDIRI), 30 July 2007.
337Neubert calls it the five different types of assets: natural capital, human capital, social capital, physical capital, and financial capital; see Neubert, S. 2000, ibid, p. 13.
338 Cultural values can support economic growth, as discussed by Cernea, M.M. 1993, ‘The sociologist's approach to sustainable development’, Finance & Development, 30(4), pp. 11-13 and Linton, R. 1968, The Cultural Background of Personality, Routledge & Kegan Paul Ltd., London.
Solow looks exclusively at inputs of capital and labor339. Economists make the basic assumption that human beings are rational individuals by maximization of exclusively materialist objectives, namely profit by producers and utility for consumers. Sociologists, on the other hand, have tended to believe that cultural norms permeate economic life and that the latter cannot be understood apart from the culture.340
With reference to the Sundanese culture from interviews with
respondents the researcher identifies five sociocultural aspects that can
influence borrowers’ behavior in business and also drive expenses: customs and traditions to maintain harmony with natural resources in the environment such as land for farmers and sea for fishermen, events marking Islamic celebrations, rituals marking the family life cycle and business ethics practices and trust development.
The following section describes these dimensions in the Sundanese cultural environment and how they simultaneously impact microborrowers’ and microfinance institutions’ economic behavior.
4.2.1. Traditions to maintain harmony with the environment
The farmers in rural areas and fishermen in coastal areas maintain strong relationships with their environment, the land and the sea, in the belief that
‘someone great’ takes care of their living. They perform a set of ceremonies on
special occasions (hajatan or salametan) that links blessings (barakah)
presented to express gratitude in expectation of security (kasalametan), and
good things for the future. Salametan is also easily found in our daily lives on
any occasion when people feel blessed. The element of salametan is derived
from pre-Islamic traditions then interpreted in Islamic terms, although salametan
is also directly related to Islamic occasions.341
339 Solow, R. 2000, Growth Theory: An Exposition, Oxford University Press, New York.
340 Granovetter, M.S. 1985, ‘Economic action and social structure: The problem of embeddedness’, American Journal of Sociology, 91, pp. 481-510.
341 See Woodward, M.R. 1988, ‘The Salametan: Textual knowledge and ritual performance in Central Javanese Islam’, History of Religions, 28(1), pp. 54-89.The Sundanese adopted the genre of salametan from their neighbors, the Javanese, during domination of the Sunda region by the Sultanate of Mataram in the 17th century. Salametan has a central role in Sundanese
It is used to express gratitude for achievement of business performance
during the year. Salametan is not the microfinance institution’s formal business
but the BRI Units loan officer (mantri) and BPR officers understand salametan is
one of the sociocultural aspects where they are involved. Salametan need their
personal appreciation as they are also part of the community and village environment. It has become common practice for BRI and BPR officials to conduct salametan in a private capacity and not in the name of the banks. These salametan are gestures that accommodate tradition as well as express gratitude, and they provide cultural and psychological support for management,
employees and borrowers. The borrower respondents perform salametan to
develop new business networks, to offer new products and services and to
show their intention to strengthen business commitments.342 Supported by
traditional ceremonial practices, such as preparing special yellow rice cones for
ceremonial meals (tumpengan), prayers and requests; the microborrowers find
strong psychological and social support for developing successful businesses.
On the other hand, salametan requires money, time, and direct involvement of
the respondents. Salametan also shows the social status of borrowers; the higher the social status the more they have to pay.
There are various salametan found in the research areas that have a direct or indirect impact on borrowers’ behavior, and which need to be
considered by the mantri of BRI Units or BPR officers in their management of
microcredit loans:343
1. A thanksgiving ceremony by farmers (salametan sedekah bumi) is a
society. Geertz identifies the salametan as a core ritual in Javanese culture and as a animistic rite intended to reinforce village solidarity. See Geertz, C. 1960, The Religion of Java, Free Press, Glancoe, Ill, pp. 10-15.
342Although salametan is not a formal institutional activity and not found in the job description of BPR officers (interviews with Hadi Susilo, BPR Pola Dana in Indihiang, district of Tasikmalaya, 4 May 2006; Sunarko,BPR Kencana Cimahi, 17 January 2006; Mukmin, BPR Kapetakan, 29 March 2006 and BRI Units), nevertheless they agreed to perform it. Salametan is held personally not formally as an institution. It is to maintain good business relationships with customers at the end of the year or at the time of lebaran, a day of celebration at the end of the fasting month. The borrowers perform the ceremony (syukuran or salametan) and ceremonial meal as an expression of gratitude to Allah swt and these are commonly held in the houses of families or in offices internally between management and employees.
343 Geertz differentiates between four main types of ceremonies in which a salametan meal is an essential part: life cycle ceremonies, ceremonies of the Muslim calendar, ceremonies concerned with the social integration of the villager and ceremonies held irregularly and when needed. See Geertz, C. 1960, ibid, p. 30.
ritual to bless the land as a source of living. This comes from the basic idea that human beings are created from the soil, which is lived on and the villagers have to maintain the soil and environment. The ritual is also to respect their ancestors who prepared and developed the land for them.
Pak Kunjang Ruslan, a borrower of BRI Unit Puteran, is about 41 years
old with a high school education, who was born and is living in Paseh village, Puteran, in the Pagerageung district of Tasikmalaya. He has his own paddy
fields and he has been trading in agricultural products since 1988. Pak Ruslan
admits that in order to run his business he takes rational actions in price calculation and risk, good business practice and follows all the regulations and what his Islamic religion says. He doesn’t believe in and doesn’t seek advice from a native healer (dukun) who deals with supernatural entities. In planting paddies, he says he follows the seasons and generally practices good paddy cultivation. He says:
“I see visitors (peziarah) and peasants go by, bringing foods and rice cone for ceremonial meal (tumpengan) to Geger Beas, in Sukadana village, before their paddy is harvested. There is a sacred place of two graves of local people’s ancestors who pioneered the conversion of forests into living areas and paddy fields. The visitors pray at the graves and ask Allah SWT to bless all of them, be grateful for good rice production and bless the next harvests. After praying they eat the foods they bring. The devotional visit is held once a year although the harvest occurs twice or three times yearly. I do not attend what people usually call earth offerings (sedekah bumi). I thank Allah swt directly for every fortune (rezeki) I get and fulfill my entire obligation on zakat, i.e. 2.5% of my income, donations (sedekah), taxes and all social contribution to my local community”.344
2. Fishermen and people living in coastal areas perform annual
salametan called sea offerings, a thanksgiving ceremony held by fishers (sedekah laut). The researcher met nine respondent borrowers. They live in Gebang Mekar village; Gebang is a coastal area of Cirebon district. They maintain stalls (warung) that supply the fishermen and fish traders (who are also the owners of some boats) with their daily needs. The respondents explained that:
“Sea offering is salametan especially held by people whose livelihood is fishing. The fishers prepare ritual offerings consisting of buffalo head, variety of foods, cigarettes, flowers, and drinks to be presented for what they deem as the Rulers of the Sea who support and protect their life while fishing. They also pray to Allah SWT to request His blessing and protection, grateful for the catch they have during the year and hope for better fishing in future seasons. They prepare the offerings in the form of a boat, directed to the sea, and followed by many decorated fishing boats during a carnival. Then the offerings are sunk into the sea, which is called dilarung. Salametan is continued on the beach with various entertainments, such as wayang kulit or shadow puppetry, music and a bazaar. The respondents explain a sea offering ceremony (nadran) needs a lot of money. The participants have to contribute based on their capability. They feel they should perform it, because working in the sea is risky and they need protection from natural calamity and uncertainties of the catch.345
3. A salametan that involves a big gathering of people is held when a
factory starts to mill sugar cane, as the new cycle of sugar production begins. One sugar factory, Rajawali II Cirebon, is located in the research area and the ritual for sugar cane milling (salametan giling) has just begun. There are fifteen members of P4K groups346 in the rural village of Cipeujeuh Wetan, Lemah
Abang, district of Cirebon and salametan giling emerges as one of the topics of
discussion. They explain that:
“The participants of the ritual are mainly the management and employees of the sugar factory and the farmers as suppliers of fresh sugar cane. It is a rite of the first cut of selected fresh sugar canes (petik tebu), called the bride of sugar canes (panganten tiwu), where there are prayers, turning on the machines for the first shift of milling and other rituals followed by various entertainment such as wayang golek or wooden puppet show, music and games. This salametan giling is extended to thank Allah swt for a good harvest of sugar canes and a high expectation that the factory will run well during its production. It is also to maintain good relationships between the farmers, the management and employees of the factory, people in the local community and local government. The ritual attracts people who come to watch. It is a big gathering and supported by a bazaar, usually
345 Interview with a group of nine borrowers, Gebang Mekar, Gebang, 30 March 2006.
346 The BRI branch office charges P4K groups at a fixed rate of 1% interest per month or 22.15% per annum. They receive a lower rate of interest in comparison to kupedes microcredit with a flat interest rate of 1.5% per month or equivalent to 33.2% annually. The lower interest rate is funded by the BRI rather than the government.
for about two weeks. We conclude that the bazaar is a marketing opportunity for our products”.347
The abovementioned ceremony in rural and coastal areas is a
combination of Islamic and animistic beliefs intended to support economic activities, boost psychological confidence, as well as to reinforce villagers’ solidarity and to maintain their relationship with the environment. In contrast, borrowers in urban areas like Cimahi have a different relationship with the environment. They feel a greater distance from nature and from “someone
great” as a source of their livelihood.348 They are a loosely knit community; so
salametan are held less frequently and only when needed. In these urban areas the ritual is less significant in people’s lives. Their relationship becomes more dependent on business and organization of capital or professionalism with
rational and individualistic relationships. The holding of salametan also has no
effect on social status in urban areas.
Differing from urban areas, such as in Cimahi, in villages (kampongs) in
coastal and rural areas where most of the people live close to nature and with
strong community relationships, salametan is still a routine ceremony to protect
their livelihood. The mantri of BRI Units and BPR officers stated that some sociocultural components need to be assessed as part of the standard
operating procedure of their work.349 Here microcredit regulations and
microcredit procedures are up against sociocultural values of borrowers and the community. The borrowers admit that holding a ceremony involves excessive
expenditure but they consider salametan as part of their cultural and community
obligations. Consequently the borrowers have to meet the costs for this sociocultural ritual when ceremony costs cannot be funded by microcredit.
347 Group discussion with a P4K group, Cipeujeuh Wetan, Lemah Abang, Cirebon, 1 April 2006. 348 Lucky Ibrahim, a producer and trader of furniture, and Djadja, who manages a pharmacy and drugstore, recognize that capital, banking relationships and professional networks and professionalism are the resources of their businesses. Syukuran, a meal for the blessing of Allah swt, is held within their families. Interviews with Lucky Ibrahim, Cimahi Tengah, 17 January 2006; Djadja, Cimahi Tengah, 23 January 2006.
349Interviews with Endang Sumarna BRI Unit Puteran, 3 March 2006, Aris BRI Unit Gebang, 28 March 2006, Mukmin BPR BKPD Kapetakan, 29 March 2006 and Hafid Wahyudi BPR BKPD Pagerageung, 4 March 2006.
4.2.2. Islamic celebrations
All of the respondents in the three research areas confess Islam. Interviews with
Hj. Popon, H. M. Hidayat, Hj. Mimi and H. Ayat Hidayat indicate that certain
ibadah activities need money and they admit:
“We spend extra expenses for going on the hajj and expenditures during the Islamic holy days such as the fasting month (ramadhan/bulan puasa), day of celebration atthe end of the fasting month (eid ul-fitr’/lebaran syawal) or the feast of sacrifice (eid ul- Adha’/lebaran haji)”.350
Hajj, the religious pilgrimage to Mecca, is one of the five fundamental religious obligations of Islam. It is a religious calling, once in one’s life. Anyone who wants to be a hajj (male hajj) or hajjah (female hajj) should have good command of Islamic practice. There is limited opportunity and due to the high cost of the journey, hajj andhajjah induces social status of the villagers. Prior to departure and after returning from Mecca and Medina, usually hajj and hajjah perform a ritual blessing (syukuran) called walimatul hajj, attended by relatives and neighbors. It is recognized as a cultural habit and serves to enhance the social status of the pilgrims, but also needs to be financed. This mostly happens in rural and coastal areas where there are close relationships with kin and neighbors but not usually practiced in urban areas. The microfinance officials need to check if the microborrowers’ intend to go for hajj and that the cost will not be funded by the microcredit loan.351 There are villagers who sell their
assets, such as land, house or livestock, to fund the hajj. For microborrowers, the banks expect the cost will be financed by borrowers’ own funds. The religious requirement is that the person embarking on the hajj should have
350 Interviews with Hj. Popon, Cimahi, 18 January 2006, H. M. Hidayat, Cimahi Selatan, 16 January 2006, Hj. Mimi Pagerageung, 28 February 2006, H. Ayat Hidayat, Ciawi, 23 March 2006, Abas, Cirebon, 6 April 2006.
351 In 2009 thegovernment charged the hajj for flight and accommodation based on the port of embarkation: from Aceh $US 3,243, Medan $US 3,333, Batam $US 3,376, Padang $US 3,329 US$, Palembang $US3,377, Jakarta $US 3,444, Solo $US 3,407, Surabaya $US 3,512, Banjarmasin $US 3,508, Balikpapan $US 3,544, Makassar $US 3,575 plus Rp. 100,000.00 per person, see Peraturan Pemerintah no. 31/2009 Biaya Penyelenggaraan Ibadah Haji 2009. In addition to these government charges, there are various social expenses incurred by pilgrims (jemaah haji) for salametan, praying or ratiban, being farewelled and welcomed home, and souvenirs for relatives and friends.
enough funds from halal sources to fund the pilgrimage. In the case of loans from the BRI and BPR, which involve the payment of interest, for religious
reasons these loans cannot be used to fund these costs.
For the respondents and Muslims in general, ramadhan and lebaran is to
purify human relationships with Allah swt, and strengthen family and social relationships (silaturahim). It is not only to develop a better life, but also has a
wide social and economic impact. The BRI Units mantri and BPR officers
explain that during the month of ramadhan villagers spend more money
preparing foods. The holy days of lebaran are celebrated with idul fitri morning prayer; donating to zakat and charity, and silaturakhim by visiting relatives. Social and economic aspects are recognized when the villagers enjoy the holy days with new clothes, new shoes, more food and recreation. The villagers from rural and coastal areas visit in the cities and have picnics. Consequently,
significant expenses during ramadhan and lebaran make demands on the
villager’s savings, so they sell assets or use microcredit money. These
expenses also increase demand for goods and services in the local economy. BRI Units, BPR and cooperatives usually prepare extra cash for the holy days in their office to accommodate cash withdrawals.
At the national level, the Indonesian government recognized long national joint holidays (libur bersama nasional), for the first time, before and
after lebaran in December 2002 and December 2003352 and this continued
every year.353 It is an opportunity to perform a homecoming, a tradition of returning to the village (mudik/ pulang kampung) to recognize their family origins in the village where they were born. In Sundanese the expression is
muncang labuh kapuhu, kebo mulih pakandangan; kudu inget ka bali geusan ngajadi. It is an opportunity for villagers working in urban centers, such as Cimahi, to return to their village to get together with their relatives and friends and to celebrate their success working in the city. This long national holiday
352 Joint Decision by the Ministers of Religion, Workers and Transmigration and Efficiency of Government Organizations (Keputusan Bersama Menteri Agama, Menteri Tenaga Kerja dan Transmigrasi,dan Menteri Pendayagunaan Aparatur Negara Republik Indonesia,) no. 461/2002, no. EP.216/MEN/2002 no. 01/SKB/M.PAN/XI/2002, 25 November 2002 on national holidays (tentang Hari Libur Nasional dan Cuti Bersama), 2002 and 2003.
353 For 2009 the government released a Joint Decision of ministers: No. 4 Tahun 2008; KEP. 115/MEN/VI/2008 and SKB/06/M.PAN/6/2008, 9 June 2008.
goes for about 10 days, and results in postponing business activities, but people spend extra money to celebrate lebaran.
There are other important Islamic celebrations including the Islamic New
Year on the first day of Muharam month; Maulid Nabi, the birthday celebration
of the Prophet Muhammad saw, peace be upon him, and the Isra and Mi’raj.
The last is regarded as when the Prophet Muhammad’s saw made the
miraculous night journey from Mecca to Masjid al-Aqsa or al-Aqsa mosque and