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By Root 1018 0

in Indonesia on a program not unrelated to the work he and Ann had done earlier. The aim of the new program, run by a state-owned bank called Bank Rakyat Indonesia, or the People’s Bank of Indonesia, was to make small loans on a broad scale to low-income rural households throughout the country. At a time when the term microfinance was not the household word that it has since become, the Bank Rakyat Indonesia project, launched in early 1984, had gotten off to a remarkable start. By late 1985, the bank had made nearly one million small loans, ranging in value from a few dollars to a few hundred dollars. It would soon be initiating new loans at a rate of 120,000 a month. The program held the potential to benefit small enterprises of the sort Ann had studied as an anthropologist, worked with as a development consultant, and tried to help in her years at Ford. So in the summer of 1988, after Maya graduated from Punahou with plans to enroll at Barnard College in the fall, Ann moved back to Jakarta to work with Patten on what was quickly becoming the most successful commercial microfinance program of its kind in the world.

Once again, her dissertation would have to wait.

“Anyway, they are paying me well and I need to fill up my bank account again. (How’s that for revolutionary fervor?),” she wrote to Suryakusuma in August 1988.

The credit program had arisen out of the ruins of an earlier effort at rural lending. During the 1970s, Bank Rakyat Indonesia had set up a network of 3,600 small banking units for the purpose of channeling government-subsidized credit to rice farmers under the country’s push for rice self-sufficiency. Lending under that program had peaked in the mid-1970s, after which operational losses had ballooned. So it had been phased out, leaving the bank with an extensive network of fully staffed loan offices with little to do. With the encouragement of the Ministry of Finance and advice from the Harvard Institute for International Development, with which Dick Patten was affiliated, the bank had tried something new.

From the beginning, anthropologists had shaped the new credit program. Marguerite Robinson, an American anthropologist who had done fieldwork in India and spent twenty years teaching, had joined the Harvard institute and been sent to Indonesia to work with the Ministry of Finance. James Fox, the anthropologist from Australia whom Ann had known in Jakarta in the early 1980s, had worked with Robinson and Patten advising the bank. From anthropological fieldwork, including Ann’s, they knew that rice farming was just one of many economic activities in Indonesian villages that needed credit in order to grow. They also knew, from village studies, that government-subsidized credit, under the old system, had reached only a small fraction of villagers. It needed to be more widely accessible. So, working with the finance minister, the consultants began exploring a program of unsubsidized commercial microfinance. The bank would lend money for any reasonable economic activity, not just rice farming. The program would soon operate without an ongoing subsidy; instead, it would charge interest at the market rate. The market rate was nearly twice the old rate. But most villagers, if they borrowed money, did so through loan groups or moneylenders, who charged in excess of one hundred percent interest on an annual basis. Even with an interest rate of thirty-two percent, it was argued, the new program would be an improvement.

The project took off. Within two years, with the help of a microsavings program, the new general credit program was self-sustaining. By 1989, the bank had 2.7 million rural savings accounts; it had made as many as 6.4 million loans to 1.6 million borrowers. The microfinance program would become the biggest and most lucrative part of the bank’s operations. In 1999, Fox called the program “probably the single largest and most successful credit program of its kind in the developing world.”

Ann joined the team in 1988 and worked on and off over the next four years as a research coordinator and consultant