From Duck Farmer to Successful Businessman

· 5 minutes read

Three years ago, only through his mobile phone, Ragil Pamungkas, 29, borrowed money from a financial technology (fintech) company to raise ducks in Tegal. Now, thanks to the online lending platform, Ragil owns seven fried duck restaurants in Jakarta.

Entering the courtyard of Warung Umi Raja Bebek duck restaurant in Lebak Bulus, South Jakarta, visitors have begun to smell the aroma of freshly cooked fried duck.

Starting from a small farm in his hometown of Tegal, Central Java, Ragil never thought he would have been be able to run seven fried duck restaurants in South Jakarta and South Tangerang. Not only that, Ragil also runs a duck and chicken farm in Pemalang and Brebes in Central Java. He also partners with farmers in Bogor to producer 3,000 ducks and chickens a week.

Having been a duck farmer since 2009, Ragil has experienced ups and downs in his business. He was once cheated by duck buyers from Jakarta and other big cities, who only paid for half of their purchases. Some did not pay at all.

Ragil\'s financial condition worsened because he had difficulties in obtaining loans. Borrowing money from a loan shark became a short-term solution even though the interest rate was extremely high. He did not have any other choice because he was always rejected when applying for loans from a bank.

In mid-2016, Ragil became acquainted with a financial technology company (tekfin), Crowde, which operates as a peer to peer (P2P) lending firm or online lending platform. At the beginning he was hesitant because Crowde had just been established and was a relatively new player in the business. Ragil found the lending scheme quite interesting.

At first, Ragil secured a loan of about Rp 30 million (about US$ 2,100) to finance his duck farming. The money was not from Crowde but from its investors who channeled the funds to borrowers through Crowde. A portion of the funds was loaned to Ragil. Investors were to receive interest payment of 18 percent a year while Crowde got 3 percent of the loan.

"I liked dealing with Crowde because it gave loans under a profit sharing scheme. So I paid for it when I began to harvest the ducks, unlike other financial institutions that collect installments every month. It did not burden me," Ragil said.

In more than three years, the total value of Ragil\'s loan reached Rp 6 billion. Loans are used for productive activities.

Salt farmer

The ease of obtaining loans from a fintech company was also enjoyed by Arif Ghoni, 56, a salt farmer in Sawojajar village, Wanasari district, Brebes. Arif borrowed Rp 50 million from the Dana Laut online lending platform. He used the loan to finance the production and storage of salt during harvest time.

"Within two weeks, the loan was disbursed, in contrast to the KPR micro loans provided by banks, which can take two to three months,” Arif said.

The quick disbursement of the funds is very important for salt farmers, because. The salt can only be produced during the dry season. The loan provided by Dana Laut has a maturity period from three to six months. The lending rate charged by the company is not higher than 2 percent a month.

Arif said he was lucky to be acquainted with Dana Laut. Although the interest rate was above the average 0.9 percent per month imposed by a bank, the interest payment was not burdening as there was quick disbursement.

The fintech company also helps micro and small export their products. Maria Isabela, 24, the owner of a traditional cloth shop, Copa de Flores, said she had obtained a loan of Rp 35 million from Klik-MSME online lender in 2018. She used the funds to buy fabric from traditional weavers on Sumba Island for an exhibition in Japan.

The fintech companies help debtors, who according to conventional financial institutions have high risk, but have the potency to develop their business. They provide funds to those who have difficulty in accessing banks loans, such as Arif and Ragil.

The chief operations officer of Dana Laut, Ilham F Novtenli , said Indonesia\'s marine sector had great potential. However, conventional financial institutions are reluctant to provide loans to the sector. The marine businesses depend on the season so they have high risk. "We are encouraged to help finance this sector because of its huge potential," Ilham said.

In line with Ilham, Crowde\'s co-founder, Yohanes Sugihtononugroho, said farmers and breeders who obtained loans from Crowde had great potential but they were not be able to get funding from banks.

"I see that farmers are taking care of our stomach. But why they still live poverty? There must be something wrong. So, we were moved to help them," said Yohanes.

Researcher at Indef\'s digital and innovation economic desk, Nailul Huda, said that based on Indef\'s research, the peer-to-peer (P2P) lending platforms also provided benefits to the Indonesian economy as a whole.

Now, more people can access financial products. Through mobile phones, farmers to jamu (herbal drink) sellers can obtain loans.

The chairman of the Financial Services Authority (OJK), Wimboh Santoso, said the P2P lending platforms also helped expand financial inclusion and literacy in the community. "Now, more people can access financial products. Through mobile phones, farmers to jamu (herbal drink) sellers can obtain loans,” Wimboh said.

The executive of the association of the P2P lending platform association, Kuseryansyah, acknowledged that fintech firms had been able to expand funding. (BKY/IGA/ILO

Editor:

OJK kompascetak klik-msme warung umi raja bebek