Analysis of Increasing the Savings of the Poor Through the Community Empowerment Program

One of the requirements for business is funding. On the other hand, this is often not owned especially by groups of poor. The government have been made such policy to overcome the poverty. One of the efforts is revolving loans of the National Program for Urban Community Empowerment (PNPM Mandiri Perkotaan). By the loan, it is anticipated that there is an addition to their savings, and at the end the poor can increase their welfare. The program has been implementing in Hedam Village of Jayapura City since 2010. This research was to know whether the loan can improve welfare through saving. The Ordinary Least Square (OLS) is used to analyze data from 67 respondents. Based on the results, the loans have a positive effect on savings. On the other side, 64.6 percent of savings can be explained by income and loans. By this program, they can create a new job because most of recipients stated that these businesses as their main job. It is like a favor because most of households must support 2-3 members of their family and were majority perform by women recipients. In addition, the education level of the poor mostly primary and secondary school. Therefore, by the committed assistance of PNPM Mandiri facilitators, such loans can influence the savings of the poor. It may be the good sign for reducing the poverty. Although there are other variables may influence the model which have not been taken into this study.