Customers, in a poor corner of eastern Indonesia, borrow cash — and pay back trash.
“The program originated from the people, it is managed by the people, and the rewards are for the people,” said bank manager Suryana, who wears a black jilbab headscarf and lives with her family above the Mutiara Trash Bank in the fast-growing city of Makassar on the island of Sulawesi. “From an economic point of view, this gets results.”… Not just neighborhoods in Indonesia, but elsewhere across emerging Asia and Africa, locales are embracing “trash banking” as a way of reducing pressure on ever-growing landfill sites and allowing some of their poorest citizens access to savings and credit.
The scale of the problem facing Makassar and other Asian cities is clear from a trip to the landfill on the edge of town. Each day the city of 2.5 million people produces 800 tons of rubbish, most of which ends up at the five-story high tip, which sprawls over the area the size of two soccer pitches. Scavengers, many of them children, work alongside cows foraging for food.
A garbage disposal area in Makassar, Indonesia’s South Sulawesi province
Against this backdrop, trash banking is taking off. Residents bring recyclable trash such as plastic bottles, paper and packaging to the collection points, known as banks, where the rubbish is weighed and given a monetary value. Like a regular bank, customers are able to open accounts, make deposits — of trash, converted to its rupiah value — and periodically withdraw funds.
The city government commits to purchasing the rubbish at set prices displayed at the bank, ensuring price stability for those bringing trash in. It then sells it on to waste merchants who ship it to plastic and paper mills on the main island of Java….The city administration sends trucks to collect the waste from the Mutiara Trash Bank several times a week and brings it to a Central Trash Bank, where it is sorted for sale…
Indonesia produces 64 million tons of trash a year, of which 70 percent is dumped in open …Indonesia as a whole last year had 2,800 trash banks operating in 129 cities, with 175,000 account holders, according to the environment ministry….[IO]ther similar practices are carried out in African countries including Ghana and South Africa, in India’s cities of Pune and Bengaluru, and in Manila, Bogota and Brazil.
Excerpts from This Asian Bank Lets You Borrow Cash and Pay in Trash, Bloomberg News
May 15, 2016