Horas Djulius

Universitas Pasundan

Combating Poverty
Through the Financial
Management of Near-
Poor Families

The International Conference of Islamic Economics

and Financial Studies
FEBI IAIN Bukit Tinggi

November 11, 2021

Sustainable Development Goals

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The Main Focus
Seminar Topic :
The Role of Islamic Economics and Bussines on The Sustainable
Development Goals

1st Goal Of SDG’s : No Poverty

Main Focus :
Combating Poverty Through the Financial Management of Near-Poor
Families

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Poverty
• The situation in which a population or a
segment of the population is unable to meet
basic needs for food, clothes, and housing

• The state of not having enough material

possessions or income for a person's basic
needs.

• Poverty can have diverse social, economic,

and political causes and effects
Source : Leo Arslan, Turkey.
Free Photos from Pexels

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 Near Poor Families
 According to the Central Bureau of Statistics of the
Republic of Indonesia, the poverty line was Rp
472,525.00/capita/month (USD 33) in March 2021.
 Padang City's minimum wage in 2021 is Rp 2,484,041
(USD 175) or slightly above the poverty line.
 This indicates that a household of a husband, wife, and
two children receiving the minimum wage is only USD
43 per month above poverty.
Source : Karolina Grabowska.
Free Photos from Pexels

Near Poor Family

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Poverty in Indonesia: A Quick Overview

The number of near-poor people in 2019 :

• The number of poor people in March 2019 was 25.14

million people.
• The number of near-poor people in March 2019 was
19.91 million people.

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Research and Community service program

Research Community Service Program

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Consumption and Poverty
• If we assume that there is a link between poverty and the variables that create it, we
can deduce the following

• Y = Poverty
• X = Consumption or “Demand” of Near Poor People

Internal Moderating
Factors Factor

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Need, Want, ATP, WTP : Internal Factors
• Need : The number of commodities and services that people require in order to survive
(minimum level)
• Want : Need + Satisfaction
• ATP : Ability to pay
• WTP : Willingness to pay
• Demand : Need or Want + ATP/ WTP

Near Poor households are vulnerable to falling into poverty if they identify "Need" or "Want"
inaccurately.

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Need, Want, ATP, WTP : Moderating Factor
• "WANT" cannot be "DEMAND" unless it is
accompanied with ATP or WTP.
• When WTP exceeds ATP, it indicates that
the goods and services are in high
demand by consumers.
• The question is, 'How do prospective
consumers obtain finances sufficient to
cover their ability to pay?’
• "Near Poor people" are exposed to
information about how easy it is to get a
loan
Source : www.freepik.com
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Family Financial Planning and Management

• Family financing management :

activities aimed at managing finances in
order to meet basic and vital necessities.

Source : www.freepik.com
• Family financing planning :
The tasks of planning for future wants and
preferences and lifestyles

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Five stages of financial planning for families
• i. Being aware of their existing financial situation
• ii. Create a financial strategy
• iii. Determining a lack of money
• iv. Determine the amount of savings required
• v. Implement and monitor savings balances

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Summary
• Mistakes in managing the money of near-poor families can lead to the
family being poor, doubling the poverty rate in Indonesia.
• There are both internal (near poor communities) and moderating
factors that strengthen the link between consumption errors and
poverty.
• "Near Poor people" are exposed to information about how easy it is to
get a loan
• Islam permits “borrowing money” for productive reasons but not for
consumptive purposes.
• Scholars must educate the community on the need of family financial
planning and management. 13
Thank You