Tourism. Indonesia’s tourism village program has strong potential, but many sites remain stalled — unable to turn cultural assets into steady income streams.
Lawmaker Athari Gauthi pinpoints the main obstacles: limited financial access, unclear legal status, and insufficient business practices that prevent communities from qualifying for loans and partnerships.
Most community-run tourism initiatives begin with enthusiasm and genuine local assets: scenic landscapes, traditional performances, homestays, and craft production. Yet two recurring barriers keep these initiatives from scaling. First, many village groups lack basic financial and governance documents — formal accounting, business plans, or cooperative bylaws — which formal lenders require. Second, ambiguous legal status (unregistered groups or informal cooperatives) prevents villages from accessing MSME-targeted programs and formal procurement opportunities.
To overcome stagnation, Athari Gauthi recommends a two-track strategy: institutional readiness and tailored financing. Institutional readiness includes training local leaders in bookkeeping, product packaging, digital marketing, and hospitality standards; creating simple, standardized financial statements; and assisting groups with legal registration as cooperatives, village-owned enterprises (BUMDes), or micro-SMEs.
On the financing side, products must fit village realities. Many villages cannot provide conventional collateral, so policymakers and financial institutions should prioritize alternative credit models: group lending, microcredit based on character and cash flow, loan guarantees, and blended finance that mixes small public grants with repayable loans. Public seed funds can finance initial upgrades — sanitation, homestay improvements, and safety measures — that make sites bankable and visitor-ready.
Practical steps for government and development partners
- One-stop capacity hubs. Create regional hubs offering combined services: training (bookkeeping, hospitality, marketing), legal registration assistance, and ready-to-use templates for business plans and financial reports.
- Legalization support. Fast-track affordable registration for cooperatives or BUMDes to unlock access to formal finance and procurement.
- Appropriate finance products. Promote pilot micro-loan products for tourism villages that rely on non-collateral underwriting and revenue-share models. Public loan guarantees can reduce lender risk.
- Market linkages. Connect villages to digital booking platforms, travel operators, and regional events to increase predictable visitor demand.
- Monitoring and evaluation. Track KPIs such as visitor numbers, average spend, repeat visits, and repayment rates to measure progress and refine programs.
Success stories show that when villages adopt basic business practices and gain access to suitable finance, tourism can become a sustainable income source that preserves culture and creates local employment. Often the first barrier is not funding itself but the paperwork, training, and legal clarity that unlock financing and partnerships.
Athari Gauthi’s call to action is clear: coordinated capacity building and smarter financial products can convert stalled tourism projects into resilient community enterprises that keep benefits local. Policymakers, financial institutions, NGOs, and regional governments should align incentives now so villages become engines of rural recovery.
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