PT Vasham Kosa Sejahtera has developed a financial inclusion program to help corn farmers in Lampung.
By
·4 minutes read
Kompas/Vina Oktavia
Corn farmers in Braja Selebah village, Way Jepara district, East Lampung regency, Lampung, harvest corn. Corn production in Lampung stood at 2.4 million tons in 2017. Lampung contributed 8.59 percent to the national corn output of 27.9 million tons.
KALIANDA, KOMPAS – PT Vasham Kosa Sejahtera has developed a financial inclusion program to help corn farmers in Lampung. Farmers can enjoy non-collateral loans.
Queen Máxima of the Netherlands, in her capacity as the United Nations Secretary-General\'s Special Advocate for Inclusive Finance for Development (UNSGSA), visited South Lampung regency, Lampung, on Monday (12/2). During the visit, Queen Máxima studied the access to the inclusive finance that PT Vasham Kosa Sejahtera had developed to help local corn farmers.
“Queen Máxima wishes to directly view the inclusive finance program that our company has developed. This partnership program has become a model for studying,” Vasham Kosa Sejahtera operations director Iki Sari Dewi said on the sidelines of the Queen’s visit to South Lampung.
PT Vasham Kosa Sejahtera is a social company that was established in October 2013. The company provides funding access without collateral to local corn farmers. Around 12,000 farmers in Lampung and Central Java are clients of the company, with a total Rp 102.7 billion (US$7.5 million) in distributed loans.
Iki Sari explained that each farmer household with 1 hectare of farmland could receive a loan of up to Rp 7 million at 16 percent interest per harvest season. “If they borrow money from middlemen, the interest will be 25 percent per harvest season,” Iki Sari said.
She said that the partnership program offered not only an interest rate that was lower than middlemen’s, but also training for corn farmers to cultivate products that met industry demand. If they had a good harvest, the farmers could enjoy more competitive market prices.
Every year, the company absorbs 45,000 tons of dried corn. “Farmers can sell their corn directly to our company. We buy their corn at the market price,” Iki Sari said.
Furthermore, the company also provides funding to develop cow or goat farms. Farmers can produce manure either for sale or to be used on their farms.
Survey
Queen Máxima will be in Indonesia from Feb. 11- Feb. 13. She is the wife of King Willem-Alexander, who was inaugurated in 2013 as King of the Netherlands. The Queen is also the UNSGSA, and her visit was related to the development of inclusive finance in Indonesia over the past two years.
During her visit, Queen Máxima said that she appreciated the Indonesian government for including inclusive finance as one of President Joko Widodo’s priority programs. Through inclusive finance, Indonesia could drive the economy, especially for those without access to financial services. Indonesia could also be an example for other developing nations in implementing inclusive financing initiatives.
She said that many farmers did not have access to financial and banking services, as they had no collateral, even though many small-scale farmers needed funding to cultivate their farmlands.
“Inclusive finance is a solution for this problem,” Queen Máxima said. She said that, due to Indonesia’s archipelagic geography, expanding access to banking was difficult.
Therefore, it was hoped that developing inclusive finance could help farmers in remote regions to easily obtain business funding.
Kompas records show that Indonesia has one of the lowest rates of public access to financial services in Southeast Asia. Of the country’s 250 million people, only 21.8 percent had access to financial services. This is far below Singapore (96 percent), Malaysia (81 percent) and Thailand (78 percent). (Kompas, 31/8/2016)
Queen Máxima had visited Indonesia once before in 2016, when she attended the signing of a memorandum of understanding between the Financial Services Authority (OJK) and the UNDP on realizing the Sustainable Development Goals (SDGs) in Indonesia. The SDGs could be achieved through the improved role of financial services and inclusive financing institutions, which would eventually drive the local economy.
Meanwhile, acting Lampung secretary Hamartoni Ahadis hoped that the majority corn farmers in Lampung depended on the cattle feed industry. Therefore, a healthy partnership was needed to keep corn prices from plummeting, which would have a direct impact on the farmers’ welfare.
