loans in fiscal 1995/96. Interestingly, this figure is significantly higher than in the previous year, indicating that robust growth in savings continued even when lending growth slowed. Voluntary savings kept at the group level accounts for about one-third of total savings (Table 30).

_Outreach Depth._ P4K is the only one of the programs studied that explicitly targets low-income households. The program carefully screens applicants to ensure that all participating households have annual per capita incomes below the monetary equivalent of the price of 320 kilograms of rice (approximately Rp. 320.000 or LJS$137 in 1996 prices). Program documents claim that only about 15 percent of households nationwide have incomes at this level or below. When adjusted to 1993 Rupiah prices and compared to Indonesia's household expenditure survey, this is equivalent to virtually all program recipients having incomes in the bottom 25 percent of the income distribution for Central Java. It also implies that almost all participants have incomes as low or lower than the poorest one-third of PHBK program beneficiaries.

The program's average loan size is Rp. 155,000 (US$66). This is equivalent to about 7 percent of GDP per capita. Women's groups account for 38 percent of all P4K groups, and women account for about 50 percent of P4K beneficiaries. Approximately 60 percent of clients use loans for off-farm agricultural activities, 20 percent for home industries; and 20 percent for trading.

_Productivity._ The P4K program is relatively cost-effective as reflected by its unit costs and the reasonable interest rate required to eliminate all subsidies. Further, the subsidy figures detailed above include the start-up costs of expanding the program to new regions of the country and to first-time borrowers. It is likely that once the program has been rolled out nationwide and most target beneficiaries have received their first loan, required subsidy levels will decline significantly.

Nevertheless, it is possible that this program has a hidden cost for rural development. Ministry of Agriculture extension workers function as credit officers in this program. The cost of the time they devote to this activity is included in program costs. However, it is possible that other rural development initiatives suffer because extension agents divert time from other activities, for which they do not receive top-up allowances, to P4K, which provides compensation in excess of their regular salaries.

Furthermore, while the program is reasonably cost effective now, it could significantly improve its cost-per-output ratios if more groups obtained repeat loans. P4K's loan volume (like that of PHBK) is derived primarily from groups receiving their first loan, rather than existing groups receiving additional loans. Costs per unit output could decline significantly if more groups received repeat credits because there are start-up costs to the program, BRI, and individual beneficiaries in organizing groups and underwriting initial loans.

The program estimates that about 21 percent of groups that form never receive a loan. (These groups are referred to as "sleeping"). In addition, many groups become inactive after their first credit (known as "resting."). Only 19 percent of groups have received more than one credit. However the program does not track the number of credits that groups have received as compared to the year in which they received their first loan. Thus it is impossible to calculate what share of groups have been "resting" for years and are unlikely to be revived, and what share 73