Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. (Source: Investopedia)

Over the past year, activists at RELUNG Indonesia have been piloting a new approach to support rural economic empowerment. This approach is known as Regenerative Financial Management (RFM). It is implemented through a two-day training session, followed by mentoring participants as they establish community savings groups — a practical application of the RFM concept.

The term Regenerative Financial Management is understandably not an easy one to grasp for most participants — or for many in rural communities in general.

“It’s hard enough to pronounce, let alone understand, sir!”
— remarked one of the participants.

To bridge this gap, the RELUNG team translated the term regenerative into the Indonesian word bertumbuh, meaning to grow. While this helped somewhat, it didn’t fully clarify the deeper meaning of “regenerative” within the context of RFM.

Initially, regenerative was linked to the act of saving, which could become collective capital for communities to develop productive ventures. Like many capital-rotation models, this approach aims to generate profit — enabling businesses and financial resources to grow, or be “regenerated.”

However, as implementation progressed, the team encountered experiences that revealed richer, more nuanced interpretations of the term regenerative in this context.

Saving, It Turns Out, Serves Many Purposes

RFM training focuses on two core topics:

1. Observing Socioeconomic Conditions and Challenges in Rural Areas

2. Household Financial Management: Identifying Poor Spending Decisions

Participants are invited to discuss these themes and propose solutions. One key idea — and one that facilitators hoped would emerge — was the formation of community-based savings groups.

What’s notable is that participants connected the concept of saving with the socioeconomic and even ecological challenges revealed during discussion. This broadened the meaning of saving: it was no longer solely about accumulating capital for entrepreneurship, but also a response to real vulnerabilities faced by rural families.

Most participants were farmers or respected informal leaders in their communities. Many emphasized that saving is a strategic tool to ensure they can cover essential agricultural needs during planting season.

“After the harvest, we tend to get carried away, sir… there’s so much we want to buy!”
— shared a coffee farmer in Tanggamus, Lampung.

 

“The money was gone, sir — we had to buy rice during the long drought,”
— added a farmer from Gunung Kidul.

Indeed, in Gunung Kidul, the planting season often follows a dry spell. During extended droughts, farmers don’t just spend their cash on food — they sometimes have to sell off assets like livestock or jewelry to meet basic needs.

From these cases, it becomes clear that for farmers, saving is not just about business—it’s also a strategy for ensuring continuity in their farming efforts. In this sense, the regenerative nature of RFM lies in its function as a mechanism that secures farmers’ ability to reinvest in their livelihoods—freeing them from the burden of loans when planting season arrives.

A Broader Definition of “Regenerative”

Between April and June, the RELUNG RFM team conducted training in five villages in Gunung Kidul, in collaboration with YAKKUM Emergency Unit (YEU). These sessions specifically engaged women leaders, all of whom agreed to develop community-based savings systems.

What emerged was particularly interesting. In addition to saving for agriculture-related needs, participants identified other key priorities: saving for food during lean seasons, water access during droughts, and even education funds for their children.

This shift is significant. Instead of channeling savings toward business development — as originally envisioned in the RFM model — participants chose to focus on basic needs that are critical yet vulnerable, like food and water security.

Although this differs from the initial intent of RFM, these experiences expand the meaning of “regenerative.” They illustrate that resilience — not just economic growth — is at the heart of regenerative practice.

Regenerative Financial Management: A Pathway to Rural Resilience

In conclusion, the term regenerative in Regenerative Financial Management can and should be interpreted more broadly. It is not just about growing capital or building businesses. It is about supporting the broader well-being and resilience of savers in rural communities.

To be regenerative is to enable households to respond to crises, secure their basic needs, and invest in long-term aspirations like education. It means empowering communities to thrive despite the uncertainties of climate, economy, or social change.

Ultimately, RFM is a financial strategy designed not just to generate income, but to regenerate life itself in rural communities.

In solidarity and resilience,
RELUNG Indonesia

Kontributor:
Akhmad Arief Fahmi