TOWARDS BETTER SUPPLY CHAIN MANAGEMENT THROUGH MICRO-FINANCE: A CASE STUDY FOR BANANA PRODUCTION
Certain horticultural products in East Java such as the Great Semeru and Golden Kirana banana are considered as high value food crops. The implication is that capital can become a serious constraint limiting agricultural development, especially in Indonesia. Farm credit in Indonesia is generally subject to market mechanisms tied to commercial banks which are usually not accessible to smallholder farmers. A micro-finance scheme is proposed to overcome these problems derived and based on local resources and indigenous wisdom. By adopting the Grameen Bank methodology, we have developed a locally based microfinance institution (Prima Tani Microfinance Institution) to assist rural farmers to finance their farming activities. In addition to financial assistance (credit), we also provide the farmers with the technology they need to use the credit so that they can employ appropriate farming practices and repay the debt in a timely fashion. In East Java, this source of micro-finance has proved to be a successful means of assisting farmers who were unable to provide collateral. Starting in early 2006, Prima Tani MFI has lent to over 300 farmers and distributed about Rp135 million in Lumajang and Bojonegoro. This scheme has also improved the farming practices leading to better quality produce which in turn increases the farmers income.
Irianto, B. and Poernomo, S. (2008). TOWARDS BETTER SUPPLY CHAIN MANAGEMENT THROUGH MICRO-FINANCE: A CASE STUDY FOR BANANA PRODUCTION. Acta Hortic. 794, 155-160
Great Semeru banana, Golden Kirana banana, rural credit scheme, Ijon system, microfinance, Prima Tani, Grameen Bank