Act or Accident? The Birth of the Village Units of Bank Rakyat Indonesia

The author outlines the various stages in the growth of the Village Units in Indonesia and questions whether these developments were conscious acts or merely accidents. He proposes a conclusion that all events, when looked at in hindsight are accidents that occur in response to varying circumstances.Some of the developments in the agricultural finance sector from 1969 to 1974 that the paper mentions:

• Establishment of Bank Rakyat Indonesia (BRI);
• Setting up of Village Units in the province of Yogyakarta, similar to BRI's mobile units;
• Village units becoming fixed in one location to save costs, make better use of staff time and expand activities.

Some of the points that favor the view that the success of the project was an accident:

• Combined efforts and knowledge about successful pre-war agricultural credit methods of the project leader, the director and the advisor contributed to the success of the project; the appointment of these officials was accidental;
• Presence of FAO-FFHC-FP program in Yogyakarta at that time.

Some of the points that favor the view that the project was carefully planned:

• BRI implemented the village units only because they were similar to the existing mobile units;
• The dissatisfaction with the GOTONG ROJONG project forced the government to look for other alternatives;
• Village units had high repayment rates leading to profitability and helping BRI to decide to increase the number and types of loans.

The author concludes that the success of the project was a combination of circumstantial accidents as well as certain carefully thought out acts.