Agri-Finance Supply Side Study in Eastern Indonesia - AIP

Transcription

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Agri-Finance Supply Side Study in Eastern Indonesia
Submitted to:
SAFIRA
March 2016
Prepared By:
MicroSave
2
SAFIRA Agriculture Finance Supply Side Study
TABLE OF CONTENTS
List of Table ........................................................................................................... 3
List of Figure.......................................................................................................... 3
1.0
Background, Objective and Methodology of Study ........................................5
1.1 Methodology for the Study.................................................................................................... 5
2.0 Background of Agriculture Finance in Indonesia ..............................................5
3.0 Agriculture Finance Supply in SAFIRA Project Provinces ................................ 6
3.1 Agriculture and Banking Profile of East Java ......................................................................7
3.2 Agriculture and Banking Profile of Nusa Tenggara Barat (NTB) Province ...................... 8
3.3 Agriculture and Banking Profile of Nusa Tenggara Timur (NTT) ..................................... 9
3.4 Banking and Agricultural Profile of Papua ........................................................................10
3.5 Agriculture Finance Supply in SAFIRA Project Provinces.................................................10
3.6 Major Financial Institutions in Agriculture Finance in SAFIRA Project Provinces ......... 12
4.0 Government Programme to Support Agriculture Finance............................... 14
4.1 Kredit Usaha Rakyat (KUR/Credit for Business) ............................................................... 14
4.2 Program Kemitraan dan Bina Lingkungan (PKBL/Partnership and Community
Development Programme)........................................................................................................ 17
4.3 Program JARING ................................................................................................................18
4.4 Note on Loan Guarantee Firm ........................................................................................... 20
5.0 Agriculture Finance Models Involving Value Chain Companies in Indonesia .. 21
5.1 Syngenta/Mercy Corps/ Bank Andara Agri-finance project for Maize farmers .............. 21
5.2 POWER (Promoting Organisations That Work to Empower Rice Farmers) by Mercy
Corps Indonesia........................................................................................................................ 22
5.3 Monsanto, Bank BRI and Cargill Model for Maize Farmers ............................................ 23
5.4 Loan Guarantee model of PTPN X for Sugarcane Farmers ............................................. 24
5.5 BRI partnership with PT. Wonokoyo ................................................................................. 25
5.6 IFC Agri-finance project with Bank Danamon ................................................................. 27
6.0 Note on Agriculture finance by Corporates and SMEs .................................... 28
7.0 Recommendations for SAFIRA....................................................................... 29
7.1 Potential Collaborations for SAFIRA Programme ............................................................ 29
7.2 Models recommended for SAFIRA ..................................................................................... 30
7.3 Technical Assistance needs of FIs........................................................................................ 31
7.4 Other Support Required ...................................................................................................... 31
ANNEXURE I: Additional Government Programmes in Agriculture financing .....32
Kredit Ketahanan Pangan dan Energi (KKPE/Food and Energy Security Credit) ............... 32
Kredit Pengembangan Energi Nabati & Revitalisasi Perkebunan (KPEN-RP/Credit for BioEnergy Development and Plantation Revitalisation) ............................................................. 33
Kredit Usaha Pembibitan Sapi (KUPS/Cattle Breeding Credit) ............................................. 34
ANNEXURE II: List of Interviews/Contacts ......................................................... 36
MicroSave – Market-led solutions for financial service
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List of Table
Table 1: Major Agriculture Commodities in East Java ...................................................................................... 7
Table 2: Population Involved in Agriculture in East Java ................................................................................. 7
Table 3: FI Presence in East Java .......................................................................................................................8
Table 4: Major Agriculture Commodities in NTB ..............................................................................................8
Table 5: Population Involved in Agriculture in NTB .........................................................................................8
Table 6: FI Presence in NTB ...............................................................................................................................8
Table 7: Major Agriculture Commodities in NTT .............................................................................................. 9
Table 8: Population Involved in Agriculture in NTT ......................................................................................... 9
Table 9: FI Presence in NTT ............................................................................................................................... 9
Table 10: Major Agriculture Commodities in Papua ....................................................................................... 10
Table 11: Population Involved in Agriculture in Papua ................................................................................... 10
Table 12: FI Presence in Papua ......................................................................................................................... 10
Table 13: Agriculture Finance Supply in SAFIRA Project Provinces .............................................................. 10
Table 14: Agriculture Loan Portfolio of BPD ................................................................................................... 12
Table 15: Micro and Agri-finance loans of BPD Jatim .................................................................................... 13
Table 16: Major BPRs with Agriculture Portfolio ............................................................................................ 13
Table 17: Major Co-operatives and Credit Unions in SAFIRA Project Provinces .......................................... 14
Table 18: KUR Product Features ...................................................................................................................... 15
Table 19: KUR Achievements in SAFIRA Provinces in 2014 .......................................................................... 16
Table 20: KUR Target in 2016 for Executor Banks ......................................................................................... 16
Table 21: KUR Disbursement Target in SAFIRA Provinces ............................................................................ 16
Table 22: Product Features of PKBL Programme ........................................................................................... 18
Table 23: Targets and Achievement under JARING Programme, 2015 ........................................................ 19
Table 24: Loan Guarantee Product Features for Microloans and KUR ........................................................ 20
Table 25: Target and Achievement for Loan Guarantees for Jamkrindo ...................................................... 20
Table 26: Maize famer Loan Product- Bank Andara/Syngenta/ BPR Pesisir Akbar .................................... 21
Table 27: Project Details of POWER Programme of MCI ............................................................................... 23
Table 28: BRI Loan Product for Monsanto and Cargill Partnership Programme .........................................24
Table 29: Loan Product Details of PKBL Product of PTPN X ......................................................................... 25
Table 30: Product Features of BRI-Wonokoyo Partnership ...........................................................................26
Table 31: Product Features of KKPE ................................................................................................................ 32
Table 32: Target for KKPE, 2015 ...................................................................................................................... 33
Table 33: Product Features of KPEN- RP ........................................................................................................ 33
Table 34: Product Features of KUPS ................................................................................................................ 34
List of Figure
Figure 1: Bank Loans across Economic Sectors ................................................................................................. 6
Figure 2: KUR Model......................................................................................................................................... 14
Figure 3: Collaboration among Bank Andara, MCI and BPR Pesisir Akbar .................................................. 22
Figure 4: Mechanism of POWER ...................................................................................................................... 23
Figure 5: Monsanto- BRI- Cargill Corn Business Model .................................................................................24
Figure 6: Current Collaboration of PTPN and Sugar Mills for PKBL Distribution ....................................... 25
Figure 7: BRI - Wonokoyo Partnership Model ................................................................................................26
Figure 8: Bank Mandiri- Gudang Garam Tobacco Farmers Financing.......................................................... 27
Figure 9: IFC- Bank Danamon Partnership Model .........................................................................................28
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List of Abbreviation
BMT
Baitul Maal wa Tamwil (Sharia Co-operatives)
BI
Bank Indonesia
BNI
Bank Negara Indonesia, an Indonesia state-owned bank
BSM
Bank Syariah Mandiri
BPD
Bank Pembangunan Daerah/Regional Development Bank, provincial government owned
bank.
BPR
Bank Perkreditan Rakyat/Rural People’s Bank
BRI
Bank Rakyat Indonesia, an Indonesia state-owned bank
BPS
Badan Pusat Statistik (Indonesian Department of Statistics)
IDI
Informasi Debitur Individual/Individual Debtor Information
IDR
Indonesia Rupiah
KKB
Kredit Kendaraan Bermotor/Vehicle Ownership Loan
KKP
Kementerian Kelautan dan Perikanan (Ministry of Marine and Fisheries)
KSP
Koperasi Simpan Pinjam
KKPE
Kredit Ketahanan Pangan dan Energi/ Food and Energy Security Credit
KUPS
Kredit Usaha Pembibitan Sapi/Cattle Breeding Credit
KUR
Kredit Usaha Rakyat/Credit for Business)
LPS
Lembaga Penjamin Simpanan/Deposit Insurance Company
MCI
Mercy Corps Indonesia
MSME
Micro, Small and Medium Enterprise
NTB
Nusa Tenggara Barat/West Nusa Tenggara
NTT
Nusa Tenggara Timur/East Nusa Tenggara
OJK
Otoritas Jasa Keuangan/Financial Service Authority
SIKP
Sistem Informasi Kredit Program, programme loan information system, an information
system to track all loan under government programme
SME
Small and Medium Enterprise
USP
Unit Simpan Pinjam
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1.0 Background, Objective and Methodology of Study
SAFIRA is a 3 year programme supported by the Department of Foreign Affairs and Trade (DFAT)
launched with an objective to improve the access to finance in agriculture value chains in Eastern
Indonesia. The Programme will focus on the provinces of East Java, Nusa Tenggara Timur, Nusa
Tenggara Barat and Papua.
SAFIRA commissioned MicroSave to undertake a supply side study on the state of agriculture finance in
the programme areas. The objective of the study as defined by the ToR given by SAFIRA was:


Identify the agriculture finance given by a broad range of financial institutions including
commercial banks, regional government banks, Rural Banks (BPRs),Co-operatives and Credit
unions
Review the supply side data currently available from third parties such as Bank Indonesia,
Ministry of Agriculture and multilateral agencies

Analyse the information sources to derive robust, defensible estimates of the current annual
volume of financing in the agricultural sector of East Indonesia (as defined) and the
approximate numbers of customers reached.

Analyse available Government of Indonesia pro-credit programs including guarantees and
interest rates subsidies, including the extent to which they are being drawn on.

Focusing on current year financing, provide advice as to the possible design of SAFIRA
interventions in the future, in relation to appropriate partners and potential activities.
1.1 Methodology for the Study
MicroSave adopted a mix of secondary and primary research for the study. Indonesia has a wide variety of
financial institutions and most secondary data on agriculture finance is only available for the formal
financial institutions which are governed by the OJK/BI. Even this data, explains agriculture finance at an
aggregate level for the entire province and granular information for individual financial institution is not
available. Secondary information on co-operatives and other semi-formal financial institutions is very
limited in the public domain. We have tried to overcome these limitations through a primary research.
Secondary Research: The secondary research included desk review of information available with Bank
Indonesia, OJK, BPS data, Ministry of SMEs and Co-operatives, Ministry of Agriculture and research
reports of multilateral agencies like IFC, World Bank etc.
Primary Research: Based on discussion with SAFIRA, the primary research was conducted in Jakarta,
East java and Nusa Tenggara Barat (NTB) provinces. It included interviews with a wide range of
stakeholders including: commercial banks (including regional government owned banks), rural banks,
financial co-operatives including sharia co-operatives and credit unions, Multilateral Agencies and
International NGOs involved in agriculture finance projects in Indonesia, value chain firms (including
agriculture input companies, Poultry companies etc.). In all interviews were conducted with 28 entities.
The list of interviewees with their contact details and names of the firms represented by them is given in
Annexure 2.
2.0 Background of Agriculture Finance in Indonesia
Indonesia is one of the important agriculture and fisheries production center in the world. Agriculture
and Agri-allied activities contribute 14% to the GDP of Indonesia. Indonesia is the 3rd largest producer of
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rice and cocoa1 , 4th largest producer of coffee2, largest producer of palm oil and 2nd largest in terms of fish
capture3.
Indonesia has a robust banking and financial sector which consists of commercial banks (that includes,
state owned banks, regional government owned banks/BPDs, private banks and foreign owned banks),
rural banks (BPRs), sharia commercial banks and financial co-operatives (Koperasi Simpan Pinjam
(KSP)/Unit Simpan Pinjam (USP)). In spite of the large banking sector agriculture and agri-allied activities
(like livestock, fisheries etc.) has largely been underfinanced by the banking sector in Indonesia. Out of
IDR 3,950 trillion loan portfolio of commercial banks, only 6.06%(IDR 239 Trillion) is in agriculture and
allied sectors while the share of trading is 19.46% and processing industry is 18.39%. The percentage for
rural banks is also similar with 6.21% of the total loans (i.e. IDR 74.6 trillion) given by rural banks is for
agriculture (Refer to Figure 1).4
Figure 1: Bank Loans across Economic Sectors
Source: Indonesia Banking Statistic, as of November 2015
The reasons for the low penetration in Indonesia is due to perceived risk in lending to agriculture by the FIs
due to vagaries of weather and fluctuating commodity prices, poor agriculture infrastructure (like irrigation
facilities, access to markets and quality agriculture inputs) and small land holding size makes lending to
individual farmers risky and costly for the FIs.
This report details out the finance extended to agriculture by banks in the SAFIRA identified provinces, it
highlights the major financial players in each region. It then gives details of all the government programmes
on agriculture finance currently existing in Indonesia and also presents the major private sector initiatives
undertaken to improve agriculture finance access.
3.0 Agriculture Finance Supply in SAFIRA Project Provinces
In this section, we briefly describe the profile of project provinces identified by SAFIRA, in terms of
agriculture and banking and from then go on to explain the agriculture finance supply by the banking sector.
From the perspective of agriculture finance the major type of financial institutions include:
Commercial banks: There are a total of 118 commercial banks (including state owned, privately owned,
foreign and regional government owned) in Indonesia with a total of 20,384 bank offices spread all over
http://faostat.fao.org/site/339/default.aspx, http://www.worldatlas.com/articles/top-10-cocoa-producing-countries.html
http://www.worldatlas.com/articles/top-10-coffee-producing-countries-2014.html
3 http://www.statista.com/statistics/240225/leading-fishing-nations-worldwide-2008/
4 OJK, 2015. http://www.ojk.go.id/
1
2
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the country. Among these, the state owned and regional government owned banks (BPD) are the major
players in agriculture finance.5
Sharia Commercial Banks: There are 34 sharia commercial banks (including Sharia units of regular
commercial banks) in Indonesia which follow the sharia banking principles. Some of the Sharia banks (like
Bank Syariah Mandiri) have a good focus on agriculture lending. For BSM, Agriculture sector financing was
4.18% of the total financing in 2014.6
Rural Banks (BPRs): Rural banks or BPRs are one of the key financial institutions which cater to the
agriculture sector in rural Indonesia (most of the loans go to trading activity rather than to farmers). There
are a total of 1644 rural banks in Indonesia. There are also Syariah BPRs which follow the Sharia principles.
These are 162 such BPRs.7
Co-operatives: There are a number of different type of financial institutions which are registered as cooperatives in Indonesia these include: Koperasi Simpan Pinjam (KSP), Unit Simpan Pinjam (USP), Credit
Unions and Syariah Co-operatives (BMT). The data on exact number of credit and savings co-operatives is
not available for any of the provinces. Various estimates put that there are a total of 80,000 credit and
savings co-operatives in Indonesia. As per Inkopdit (credit union network of Indonesia), there are 917 credit
unions in Indonesia8. Only 274 of these have more than 1,000 membership.
3.1 Agriculture and Banking Profile of East Java
Agriculture contributes 15% to the Gross Regional Domestic Product (GRDP) of East Java. This is in line
with the average for Indonesia where agriculture contributes 13.8% to the total GDP. The major agriculture
crops include rice, maize, cassava, sugarcane, and soybean (refer to Table 1). East Java is the largest dairy
producer in Indonesia and contributes 57% of the total milk production. 9
Table 1: Major Agriculture Commodities in East Java
Commodity
Rice
Maize
Cassava
Sugarcane
Soybean
Dairy (Cattle)-population
Harvested Area
(Ha)
2,072,822
1,202,300
157,091
219,800
214,880
238,900
Production (Ton)
12,398,312
5,737,382
3,635,170
1,258,200
355,464
423,914
Productivity
(Quintal/Ha)
59.81
47.72
231.41
57.24
16.54
N/A
Source: BPS 2015.
Table 2: Population Involved in Agriculture in East Java
Type of Farmers
No. of Agriculture Farmers
No. of Livestock farmers
Households with Agriculture as Main
Source of Income
% of total households involved in
Agriculture
Nos.
7,957,592
3,914,063
2,895,378
27.17%
In 2014, East Java had close to 8
million agriculture farmers and 4
million livestock farmers and close
to 2.9 million households or 27.17%
of the total households reported
agriculture as the main source of
income.
Source: BPS, East Java Province 2015
http://www.bi.go.id/en/statistik/perbankan/indonesia/Documents/SPI%20Agustus%202015.pdf
BSM Annual Report, http://www.syariahmandiri.co.id/wp-content/uploads/2010/03/Management-Report-AR-BSM-2014.pdf
7 http://www.bi.go.id/en/statistik/perbankan/indonesia/Documents/SPI%20Agustus%202015.pdf
8 Inkopdit, http://www.cucoindo.org/index.php?option=com_content&view=category&layout=blog&id=70&Itemid=183&lang=en
9 http://www.gbgindonesia.com/eN/Agriculture/article/2012/overview_of_indonesia_s_dairy_industry.php
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6
8
Table 3: FI Presence in East Java
Banking Profile of East Java
East Java has a large network of banks. 85
commercial banks (including BPDs, State
owned and foreign banks) have 2,094 outlets
spread all over East Java while there are 325
rural banks (BPRs) which have 1,239 outlets
across the province. There are also 27,140
active co-operatives present in East Java
though not all may be involved in credit and
savings operations. There are 8 Credit unions
with more than 1,000 membership in East Java.
Type of FI
No. of FIs
No. of Outlets
Commercial Bank
85
2,094
Sharia Banks
36
316
Rural Banks
325
1,239
Co-operatives
27,140
Credit Unions
(more than 1000
membership)
8
Not Applicable
N/A
3.2 Agriculture and Banking Profile of Nusa Tenggara Barat (NTB) Province
NTB consists of two major island of Lombok and Sumbawa. Agriculture plays an important role in the
economy of NTB and contributes 23.54% to the regional domestic product.10 This is much higher than the
national average of 14%. The major crops produced in NTB include rice, maize, soybean, peanuts and
cassava (refer to Table 4). It is also an important centre for horticulture production like shallots etc.
Table 4: Major Agriculture Commodities in NTB
Commodity
Harvested Area
(Ha)
433,712
Production
(Ton)
2,116,637
Productivity
(Quintal/Ha)
48.80
Maize
126,577
785,864
62.09
Soybean
68,896
97,172
14.10
Cassava
4,706
92,643
196.86
Peanut
26,458
34,284
12.96
Rice
Source: BPS NTB Province 2015
Table 5: Population Involved in Agriculture in NTB
Type of Farmers
Source of Income
% of total households whose main
source of income is Agriculture
Source: BPS NTB Province, 2015
Nos.
774,264
300,367
409,285
31.57%
As shown in Table 5, NTB has close to
774,264 agriculture farmers and 300,367
livestock farmers. As per the BPS for
NTB in 2014, 409,285 households
reported that agriculture was the main
source of income. This translates to
31.57% of the total households in NTB.
Table 6: FI Presence in NTB
Type of FI
Commercial Bank
No. of Outlets
29
282
Sharia Banks
8
Not Available
Rural Banks
32
114
Co-operatives
10
No. of FIs
2,283
NTB has offices of 29 commercial banks, 8
sharia commercial banks, 32 rural banks
and 2,283 co-operatives in NTB as shown
in Table 6. There are no major credit
unions present in NTB province.
Not Available
BPS NTB, 2015
9
Credit Union (with more
than 1000 members)
None N/A
Source: BPS NTB Province 2015 and Ministry of Co-operatives
And SMEs in Indonesia, and Inkopdit Indonesia
3.3 Agriculture and Banking Profile of Nusa Tenggara Timur (NTT)
NTT consists of Timor, Flores and Sumba Islands. Agriculture contributes 29.8% to the total GRDP of NTT
making it the most important economic sector. The major agriculture crops grown in NTT are maize, rice,
cassava, peanuts and sweet potatoes.
Table 7: Major Agriculture Commodities in NTT
Commodity
Harvested
Area (Ha)
Production
(Ton)
Productivity
(Quintal/Ha)
Rice
246,750
825,728
33.46
Maize
257,025
647,108
25.18
63,836
677,577
106.14
8,177
60,032
73.42
14,046
14,886
10.60
Cassava
Sweet Potato
Peanut
Source: BPS NTT Province 2015
Furthermore, NTT has 1.44 million agriculture farmers and 638,664 households reported that their main
source of income comes from agriculture. This translates to 60% of the total households in NTT showing
the great dependence on agriculture of households in NTT as shown in Table 8 below.
Table 8: Population Involved in Agriculture in NTT
Type of Farmers
Source of Income
% of total households whose main
income comes from Agriculture
Nos.
1,440,435
679,811
638,664
60.20%
Source: BPS NTT Province 2015
Table 9: FI Presence in NTT
Type of FI
Commercial Bank
Rural Banks
Co-operatives
Credit Unions (with more
than 1,000 members)
No. of FIs
No. of Outlets
17
388
11
18
2,818
N/A
32
N/A
Ministry
Of Co-operatives and SMEs in Indonesia
Seventeen (17) commercial banks are
present in NTT with 388 offices across
the area while there are 11 BPRs with 18
Offices and close to 2,818 co-operatives.
There are 32 Credit Unions with more
than 1,000 membership.
Source: BPS NTB Province 2015 and
10
3.4 Banking and Agricultural Profile of Papua
Agriculture in Papua province is mostly for subsistence purposes consequently agriculture contributes only
14% to the total GRDP of Papua province. The major agriculture commodities grown in Papua are shown
in Table 10. Rice, sweet potato, maize and soybean are the major crops which are grown here. But the
harvested area and the production is low as compared to the other provinces of East Java, NTB and NTT.
Table 10: Major Agriculture Commodities in Papua
Commodity
Harvested
Area (Ha)
33,041
Production
(Ton)
411,893
Productivity
(Quintal/Ha)
124.66
45,493
196,015
43.09
Cassava
3,729
45,512
122.05
Maize
3,076
7,282
23.67
Soybean
3,734
3,983
10.67
Sweet Potato
Rice
Source: BPS Papua, 2015
Table 11: Population Involved in Agriculture in Papua
In Papua province over 1 million
Type of Farmers
Papua (Nos.)
agriculture farmers are present and around
1,101,913
households
depends
on
391,945 423,000
agriculture
which
is
64.21%
of
the
total
423,019
households in Papua province.
Source of Income
% of total households involved in
64.21%
Agriculture
Source: BPS Papua, 2015 and MicroSave calculation
Table 12: FI Presence in Papua
Type of FI
No. of FIs
No. of Outlets
19
272
6
17
1,784
N/A
Commercial Banks
Rural Banks
Co-operatives
In terms of presence of financial institutions,
Papua has 272 offices of 19 commercial banks
and 6 BPRs with 17 offices. In addition, 1,784
Co-operatives are present. There are 2 credit
unions in Papua province but their estimated
size is not available.
Source: BPS Papua, 2015
3.5 Agriculture Finance Supply in SAFIRA Project Provinces
There is a wide disparity in the outreach of agriculture finance across all the provinces of the study. This
section identifies the agriculture finance supply by Commercial banks, Sharia Banks and BPRs. The data
used is mostly from the OJK/BI banking statistics. There is no organisation which maintains and publishes
data for financial co-operatives and this information has not been covered.
Table 13: Agriculture Finance Supply in SAFIRA Project Provinces
Figure in IDR
Billion
2014
Com.
Bank
Sharia
Bank
2015 (as of November 2015)
BPR
Total
Com.
Bank
Sharia
Bank
BPR
Total
EAST JAVA
Total Loans
342,988
18,892
7,754
369,634
360,841
19,609
8,258
388,708
11
Agri-finance
% of Agrifinance to Total
loans
9,440
538
1,566
11,544
8,826
743
1,668*
11,237
2.75%
2.85%
20.20%
3.12%
2.45%
3.79%
20.20%
2.89%
NTB
Total Loans
Agri-finance
loans
21,242
1,894
820
23,956
23,455
1,920
887
26,262
315
54
50
419
359
73
54*
486
1.48%
2.85%
6.10%
1.75%
1.53%
3.80%
6.10%
1.85%
NTT
Total Loans
Agri-finance
loans
17,094
256
319
17,669
19,425
240
361
20,026
177
7
5
189
182
9
6
197
1.04%
2.73%
1.57%
1.07%
0.94%
3.75%
1.66%
0.98%
PAPUA
Total Loans
Agri-finance
loans
20,431
586
643
21,660
22,028
545
776
23,349
668
17
26
711
727
21
38
786
3.27%
2.90%
4.04%
3.28%
3.30%
3.85%
4.90%
3.37%
Source: Banking Statistics OJK/BI, 2014 and 2015,
* Agri-finance figure for BPR in 2015 is estimated using the 2014 ratio
Agri-finance Supply in East Java
Commercial Banks, Sharia Commercial Banks and BPRs are the major players offering agriculture finance
in East Java. The commercial banks include the state owned commercial banks (BRI,Bank Mandiri and
Bank BNI), BPD (provincial government owned bank BPD Bank Jatim), private banks and foreign banks.
In 2014, the total agriculture finance portfolio of banks and BPRs was IDR 11,544 billion which is 3.12% of
the total loan portfolio of banks. As of November 2015, the total agriculture loans portfolio was IDR 11,237
billion which is 2.89% of the total loan portfolio. Agri-finance to total loans ratio of BPRs is relative high at
20%. State owned banks including BPDs have bulk of the share in total agriculture finance portfolio in East
Java. Their share is 72% of the total, while private banks contribute 14.7% and BPRs contribute 13.3% 11.
Agri-finance Supply in NTB
In 2014, Commercial Banks agriculture portfolio is IDR 315 Billion in NTB which is 1.48% of the total loan
portfolio of banks. As of November 2015, commercial banks had IDR 359 billion of agriculture finance
portfolio which indicates an annual growth of 14% (with one month remaining) but it is still 1.53% of total
loans. BPRs had a combined agriculture portfolio of IDR 50 billion in 2014, which was 6.1% of the total
loans portfolio. This figure is not available for 2015, but even if we assume the same ratio as 2014, then
BPRs would have an agriculture finance portfolio of IDR 54 billion. Sharia commercial banks have increased
their agriculture finance portfolio from IDR 54 billion to IDR 73 billion and the share of agriculture finance
to total loans has also improved from 2.85% to 3.80% in 2015 (excluding December 2015 data). The
proportion of agriculture finance to total portfolio of all the FIs is quite low since agriculture contributes
24% to the GDP of NTB province.
Agri-finance Supply in NTT
In 2014, commercial banks portfolio was IDR 177 billion which has increased to IDR 182 billion but the
share of agriculture finance to total loans has remained stagnant at 0.98- 1.07%. Sharia banks have again
11
MicroSave calculation based on data from Kajian Ekonomi Regional Bank Indonesia and BPS 2015
12
shown a marked improvement in the share of Agri-finance in NTT which increased from 2.73% to 3.75% of
the total portfolio but the overall volume of disbursement for agriculture is very low at IDR 9 billion as of
November 2015. Similarly, BPRs have a portfolio of only IDR 6 billion towards agriculture which is an
increase of 1 billion from 2014. However, the share of Agri-finance to total loan portfolio by BPRs remained
constant at around 1.6%.
Agri-finance Supply in Papua
As compare to other focus areas of SAFIRA, agriculture loans as a percentage of total loans in Papua is
higher at 3.3% and 3.2% in December 2014 and November 2015 respectively. The loan portfolio in
agriculture increased to IDR 748 Billion in November 2015 from IDR 711 Billion in 2014. Commercial banks
played significant role as compared to sharia bank and BPRs, by contributing more than 90% of the
agriculture loan portfolio in Papua Province.
3.6 Major Financial Institutions in Agriculture Finance in SAFIRA Project
Provinces
All the provinces have presence of different types of FIs like commercial banks, Co-operatives and BPRs.
However, the number of Financial Institutions that has loan portfolio in agriculture is limited. In this
section, we have given some details on the major financial institutions across the different legal entities
which have a focus on agriculture financing.
Commercial Banks
BRI is the biggest lender to the agriculture sector in all of Indonesia including the SAFIRA programme
provinces. It is responsible for distributing all the government lending programmes like KUR, KKPE, KUPS
etc. In 2014 (detailed information is available until 2014 only), BRI disbursed a total of IDR 10.8 trillion in
all provinces under the category of Programme Loans (Kredit Program), excluding the microloan category
which is around IDR 160 Trillion. The division for different programmes includes: 70.8% for KUR Retail,
26.6% under KKPE, 2% KPEN. This amount will be more in 2015 with KUR disbursement of IDR 16.7
trillion. The target for 2016, for BRI is IDR 66.5 trillion which is more than 3 times the target for 2015. This
makes BRI the most important financial institution for agriculture financing in Indonesia.
BPD or Provincial Government Owned Banks
Out of the four (4) BPDs in East Java, NTB, NTT and Papua, Bank NTT and Bank Papua has more focused
approach on agriculture lending as shown in Table 14.
Name of BPD
Table 14: Agriculture Loan Portfolio of BPD
Total Portfolio
Agriculture Portfolio
(in Billion IDR)
(in Billion IDR)
Agriculture loan
as percentage of
Total Loan
Bank Jatim
28,412
169
0.60%
Bank NTB
3,824
22
0.58%
Bank NTT
5,500
111
2.02%
Bank Papua*
13,359
522
3.91%
Source: Annual reports of Bank Jatim- 2015, Bank NTB- 2014, Bank NTT-2014, and Bank Papua – 2014
* Bank Papua covers Papua and West Papua Provinces
Out of IDR 13.3 trillion loan outstanding in December 2014, 3.91% of Bank Papua’s loan was given to
agriculture sector. In addition, Bank Papua also actively involved in distributing government programmes,
i.e. KUR and KKPE, with total outstanding portfolio as of December 2014 IDR 227.6 billion. However, Bank
Papua did not separate its performance between Papua and West Papua.
13
In 2015, BPD Jatim has disbursed 169.5 Billion for the programme loans of KKPE, KUPS and Fisheries.
These are the major loans products focused on agriculture within the bank. For KUR it has disbursed IDR
447.8 billion but it is mostly for MSMEs.
Table 15: Micro and Agri-finance loans of BPD Jatim
Number of Borrowers
Loan Portfolio(in Billion
IDR)
KUR
8,138
447.8
KUPS
26
56
KKPE
1035
113
Warehouse Financing
10
0.78
Source: Annual Report- 2015, Bank BPD Jatim
Product Name
Bank NTT is also committed on agriculture lending and has disbursed IDR 111 billion in 2014 out of a total
portfolio of IDR 5.5 Trillion. The bank has got the license for disbursing KUR product for the financial year
2016.
Rural Banks (BPRs)
There are a number of Rural Banks which have a committed interest in agriculture in East Java and NTB
provinces. Unlike commercial banks, most of the BPRs have operations in one or two districts of the
provinces and they are more focused on commodities which are most grown in that region. The major ones
which have shown interest in agriculture are given in the Table 16.
Table 16: Major BPRs with Agriculture Portfolio
Province and Place
Agriculture Portfolio Commodities
(in Billion IDR)
Targeted
BPR Jatim
East Java, Surabaya
169
All commodities
targeted
BPR Arta Kencana
East Java, Madiun
91.3 (estimated, roughly Rice, maize, soybean,
55% of total portfolio is
shallot, sugarcane
in agriculture)
Name of BPR
Bank Pesisir Akbar
NTB, Bima
East Java, Banyuwangi
24 (estimated, roughly
80% of the portfolio)
19.47
Maize, Shallot,
Soybean, Mango, Rice
Rice and Maize
BPR Anugerah
Dharma Yuwana
(ADY)
BPR Eka Dharma
East Java, Madiun
19.8
BPR Nusuma Jatim
East Java, Malang
BPR Pujon Jaya
Makmur
BPR NTB Dompu
East Java, Pujon
16 (estimated roughly
20% of total portfolio)
14.4
Product Seasonal
Loan.
Rice, sugarcane
Sugarcane
NTB, Dompu
12.9
BPR Samawa
Kencana
NTB, Mataram
2.9
Dairy and horticulture
Seasonal loan for rice,
maize, cattle-cow
(meat)
Maize
Source: MicroSave Interviews
14
Co-operatives and Credit Unions
There are large number of credit unions and co-operatives in Indonesia most of these serve rural
populations and farmers. However, many of the co-operatives are poorly managed or too small serving in a
few villages. Some credit unions/co-operatives though have achieved scale and are sustainable. Table 17 has
a list of major co-operatives/credit unions in SAFIRA programme provinces.
Table 17: Major Co-operatives and Credit Unions in SAFIRA Project Provinces
Name of Credit
Province/Place
Agriculture Portfolio
Commodities
Union/Co-operative
(in Billion IDR)
Targeted
Cu Sawiran
East Java, Malang
12.6
Potatoes, Cabbage,
horticulture, poultry
and dairy
KSP Lombok Sejati
NTB, Mataram
10.5
Rice, Soybean, Peanut,
Fruits, Potatoes
Beef, pig, chicken, cacao,
CU Obor Mas
NTT, Maumere
17
CU Pintu Air
NTT, Maumere
CU Samijaya
NTT, Kupang
Source: MicroSave Interviews
N/A
1
clove, coconut, nutmeg
Pig, Maize, Rice
Horticulture
4.0 Government Programme to Support Agriculture Finance
The government of Indonesia has tried to address the issue of low agriculture credit by introducing a
number of programmes to improve access to finance especially related to food security, livestock and
plantations. The major government schemes for improving agriculture credit are: Kredit Usaha Rakyat
(KUR), Program Kemitraan dan Bina Lingkungan (PKBL) and Program JARING. The details of each of
the scheme have been highlighted in this section.
Other government programmes aimed to support agri-finance, i.e. Kredit Ketahanan Pangan dan Energi
(KKPE), Kredit Pengembangan Energi Nabati & Revitalisasi Perkebunan (KPEN), and Kredit Usaha
Pembibitan Sapi (KUPS) are dis-continued and are under review. These programmes are described in
Annexure 1. These products may again be re-introduced in the future and SAFIRA may want to look at the
programme features to understand banks experience with different agriculture finance products.
4.1 Kredit Usaha Rakyat (KUR/Credit for Business)
KUR is a productive loan/financing to SMEs, cooperatives and agriculture farmers who are excluded or are
ineligible to get loans from commercial banks. The basic purpose of here is to provide affordable loans for
productive purposes among the under-banked segments.
Figure 2: KUR Model
15
The government uses the stated owned banks and the state owned loan guarantee companies to execute the
loan programme. Figure 2 gives the role of all the players involved in the KUR programme. The loan model
of KUR is:





Potential client submits loan proposal to the bank, bank update the client profile at Sistem Informasi
Kredit Program (SIKP/programme loan information system) and verifies the client has never taken
other loans from banks
Bank analyses the loan proposal, submits the proposal to guarantor company and once it agrees the
bank disburses the loan
Guarantor company issues guarantee certificates as per the SOP and upload to SIKP
KUR beneficiaries have to the obligation to pay interest and principal instalment to the bank as per the
loan agreement
Executor banks submit claims to the guarantor company for loans overdue more than 120 days
(classified by BI as Collectability 4) and more than 180 days (classified by BI as Collectability 5)
Product Feature of KUR
There are three types of KUR products: KUR Micro, retail and TKI. KUR TKI is loans for migrant workers
and is not related to agriculture. For the purpose of further discussion we will focus on KUR Micro and
Retail.
Table 18: KUR Product Features
KUR Micro
Product
Features
Loan Purpose
KUR Retail
Both KUR Micro and Retail are given for Working capital and investment purposes.
The two products only differ in the size of the loan disbursed
Loan Size
Up to IDR 25 million
Interest rate
For all 3 KUR products the interest rate charged is 9% p.a. Government provides
interest subsidy for banks to cover the balance of interest for the banks.
Loan Term
 Up to 3 years (for working capital)
 Up to 4 years (for working capital)
 Up to 5 years (for investment)
 Up to 5 years (for investment
Repayment
Monthly instalment
Frequency/
As per the executor bank’s internal policy, but in the field MicroSave team found out
Conditions
in general KUR loans have monthly repayment and are not seasonal loans
Collateral
 For KUR Micro: No collateral required but all banks take collateral as a
Requirements
psychological collateral. Collateral taken is not legally bound so assets cannot
be used to recover the loan.
 KUR Retail: Hard collateral like land certificate
 Guaranteed by guarantor company (e.g. Jamkrindo)
Executor Bank
BRI, Mandiri, BNI, Maybank, Bank Sinarmas, BPD Kalimantan Barat, Bank BCA,
Bank Artha Graha, BTPN, Bank Bukopin, BPD Nusa Tenggara Timur (NTT), BPD DI
Yogyakarta, BPD Sulawesi Selatan Barat, BPD JavaTengah and BPD Sumatera Utara
Guarantor Bank Perum Jamkrindo, PT Askrindo, PT Jamkrinda Riau, PT Jamkrinda Sumatera
Selatan, PT Jamkrinda Bangka Belitung, PT Jamkrinda JavaTengah dan PT
Jamkrindo Syariah
Other
 Person should not have received prior loans from commercial banks as shown by
Conditions
the SID system of Bank Indonesia.
Target and achievement
During 2015, IDR 22.7 trillion was disbursed under KUR as against a target of IDR 30 trillion in all the
regions which translates to 75.58% achievement. Individual province wise data of KUR realisation is
available only for 2014 and it is given in Table 23. There is no available data for distribution of KUR as per
16
economic sector, however, Ministry 0f Agriculture reported that KUR in agriculture sector (in 2014) was
IDR 7.4 trillion or reached 150.22% of target, i.e. IDR 5 trillion 12. Table 19 shows KUR target realisation in
2014 by province where SAFIRA focus on13:
Table 19: KUR Achievements in SAFIRA Provinces in 2014
Province
KUR Realisation (2014)
Java Timur
Nusa Tenggara Barat
Nusa Tenggara Timur
Papua
Indonesia
Number of
debtor
450,369
IDR Billion
6,052
44,571
606
24,023
20,588
2,443,907
434
426
41,149
In 2016, there are 19 commercial banks (include provincial-government owned banks/BPDs) and 5 multi
finance companies have been appointed by the government of Indonesia to execute the loan with initial
target set at IDR 100 trillion nation-wide. This target has been revised upwards in February 2016 to IDR
103.24 trillion. Table 20 shows the distribution of KUR target from government for each bank14 (The target
distribution is available only for the earlier target of IDR 100 trillion. The revised targets for each bank is
not available till the writing of this report).
Table 20: KUR Target in 2016 for Executor Banks
Bank
KUR
KUR
KUR labour
Micro
Retail
placement
BRI
56,000
10,000
500
Bank Mandiri
1,000
11,000
1,000
BNI
500
10,860
1,000
BII Maybank
500
Bank Sinarmas
500
BPD Kalimantan Barat
50
100
BPD NTT
10
40
Other commercial
1,000
2,000
500
banks
Other rural banks
1,940
NBFI
500
1,000
Total
61,000
35,000
4,000
Total
66,500
13,000
12,360
500
500
150
50
3,500
1,940
1,500
100,000
Based on the table above, the biggest portion was allocated to BRI, i.e. IDR 66.5 trillion (66.5% of total
target).15 Following table shows BRI target in SAFIRA operation areas in regard to KUR distribution in
2016.
Table 21: KUR Disbursement Target in SAFIRA Provinces
Province
BRI Target in 2016
Other Banks
(IDR Billion) Number of clients
http://psp.pertanian.go.id/assets/file/2015/LAP%20KINERJA%20DIT.%20PEMBIAYAAN%20TA.%202014.pdf
http://psp.pertanian.go.id/assets/file/2016/BUKU%20STATISTIK%202015.pdf
14 Setyo, Braman, “Subsidi Bunga KUR 2016 dan Peran Komite Kebijakan terhadap LKBB”, presented in Semarang, January 2016
15 http://bisnis.liputan6.com/read/2404526/pemerintah-siapkan-rp-100-triliun-untuk-kur-2016
12
13
17
East Java16
3,554
168,000
NTB17
300
13,000 Total target: IDR 1.1 trillion18
19
NTT
200
NA Bank NTT: IDR 127 billion20
21
Papua
3,000
NA
Indonesia
66,500
NA
Note:
 BRI Area Bali and Nusa Tenggara (covers Bali, NTB and NTT) targets to disburse IDR 4.4 Trillion
to 197,413 clients in 201622.
 Bank BNI has a target to disburse 30% of its total KUR loans (IDR 11 trillion) in Eastern Indonesia
which includes: Sulawesi, Maluku, Papua and NTT province.
Issues in Implementing KUR


KUR can be distributed to all economic sectors, but as per government the preferred sectors are
agriculture, fisheries, manufacturing industry and trading. In practice most of the banks other than
BRI do not favour agriculture. Most of the banks use KUR to finance MSME’s who are traders or in
other occupations. Some of the reasons given are:
 Not all banks have the necessary infrastructure to manage a micro/rural loan programme,
as most branches/units exist only in urban area, limited number of staff to manage micro
loan, staffs are trained to prefer bigger loan size in regards to target and performance.
 In general, banks prefer to disburse KUR in trading or manufacturing sectors and less
favour on agriculture because of bad experience and high risk perception.
 With the feature of monthly instalment payment, this loan is not matched with farmers
which has seasonal income.
Liquidity issue for the bank and guarantor company. Guarantor Company sometimes delay to pay
the claim due to verification process as well as the liquidity issue. This also affected bank’s liquidity
beside the fact that 100% of the disbursed fund came from internal source.
4.2 Program Kemitraan dan Bina Lingkungan (PKBL/Partnership and
Community Development Programme)
PKBL is offered by state-owned company like PTPN X to MSMEs and farmers. The product is part of the
government mandate that each company should spend at least 2% of its profit for partnership programme
and another 2% for community development programme. The partnership programme is aimed to improve
MSME capabilities and make them self-sufficient and more robust.
PKBL activities may differ from one company to another, but in general the purpose is to:
 Provide productive loan (for working capital and/or investment purpose) to MSMEs linked to state
owned companies. For example: Sugarcane farmers who sell to state owned sugar companies
(PTPN X)
 Provide additional loan for MSME partners to fulfil order from their buyers
 Provide technical assistance programme for capacity building, in term of training/education,
internship and promotion
The company is allowed to select partners/community which are affected by its business or located in its
surrounding area and may include agriculture, trading, business service, etc.
http://jatimprov.go.id/read/berita-pengumuman/koperasi-dan-ukm-jadi-generator-pertumbuhan-di-jawa-timur
http://bisnis.liputan6.com/read/2431221/kur-lancar-jurang-pendapatan-di-ntb-turun
18 http://bisnis.liputan6.com/read/2431221/kur-lancar-jurang-pendapatan-di-ntb-turun
19 ˆ internal calculation, based on BRI target in Bali and Nusa Tenggara and loan portfolio portion of each of these provinces (as of
SPI November 2015)
20 http://www.neraca.co.id/article/63622/bank-ntt-dan-kalbar-ikut-salurkan-kur-2016
21 http://papua.antaranews.com/berita/454217/pemprov-papua-dorong-pelaku-usaha-manfaatkan-kur
22 http://bali.tribunnews.com/2016/02/11/menteri-puspayoga-serahkan-kur-bri-dan-kartu-iumk-di-gianyar
16
17
18
Table 22: Product Features of PKBL Programme
Details
Product
Features
Loan Purpose
Working capital and investment
Loan Size
Interest rate
6% p.a. This is less than the interest of KUR
Operational areas
As per the operational areas of company (the surrounding area)
Loan Term
Up to 24 months
Repayment
Frequency/
Conditions
Monthly instalment loan
Collateral
Requirements
Executor Bank
No collateral required
All state owned companies including state owned banks (for example: BRI, BNI,
Bank Mandiri) have to participate in PKBL
As of 2014, total net income for all state-owned company was IDR 154 trillion (www.bumn.go.id), it means
that approx. IDR 3,080 billion should be allocated for partnership programme and another IDR 3,080
billion for community development programme. Based on MicroSave internal calculation of 15 biggest
state-owned companies (who provided public data) out of 119 companies, there were approx. IDR 622.2
billion disbursed in 2014 under PKBL programme.
Issues in Implementation of PKBL



Some state-own companies do not have capacity to manage loans.
PKBL is suffering from high NPL, with some companies reporting as high as 15%.23 This is related to
the above point as companies are unable to manage these loans
State owned banks like BRI and Bank BNI are mostly offering their PKBL loans through state owned
plantation companies. They are not offering this through their retail and micro-banking units as it
competes with other products like KUR.
4.3 Program JARING
JARING in Bahasa literally means “net”, but in this case it is an abbreviation of Jangkau, Sinergi dan
Guideline (Reach, Synergy and Guideline). This programme is a collaboration between Otoritas Jasa
Keuangan (OJK/Financial Service Authority) and Kementerian Kelautan dan Perikanan (KKP/Ministry
of Marine and Fisheries) and has been launched in May 2015. The purpose of the loan is to improve the
access to finance to the fisheries sector especially the low income fishermen.
23
http://finansial.bisnis.com/read/20140428/309/222962/pelindo-iii-targetkan-penyaluran-pkbl-rp20-miliar-
19
This programme is supported by 13 state-owned and private banks (includes two provincial government
owned bank/BPDs), increase from the starting phase which was 8 banks 24,
insurance companies, and multi finance companies. The roles of each party
 Joined in May 2015:
are as follows:
BRI, Bank Mandiri,
BNI, Bank Danamon,
 Bank: to provide loan/financing to bankable clients
BTPN, Bank Permata,
 Loan Guarantee/Insurance company: to provide loan guarantee and
Bank Bukopin, BPD
loan-linked life insurance to the clients/ fishermen.
Sulselbar
 Multi finance company: to provide loan/financing to less-/un Joined later at the end
bankable clients
of 2015: BCA, Maybank,
CIMB Niaga, Bank
Sinarmas, and BPD
25
Target and achievement of JARING programme
JavaTimur
In initial phase (year 2015), the programme targets to settle following
qualitative issues26:



Provision of comprehensive data and information in maritime sector in the form of a JARING book,
that contains potential of business and risk map of marine and fisheries sector in Indonesia, description
of value chain business and financing scheme to marine and fisheries sectors as well as existing
regulation issued by government related to this sector.
Provision of favouring regulation towards financing effort in maritime sector
Sustainable socialisation of JARING programme.
The achievements in terms of loans disbursed is given in Table 23.
Table 23: Targets and Achievement under JARING Programme, 2015
FSP
Target in 2015
Achievement (IDR
Note
(IDR billion)
Billion)
Banks*
5,370
4,410 As of September 2015
Non-banks
1,700
252 As of October 2015
Jamkrindo (Loan
N/A
81.96 Loans guaranteed as
Guarantee Company)
of November 2015
*the data was provided by eight (8) banks who joined the programme since the beginning, the remaining five (5) banks
joined later at the end of 2015 and data is not available for these banks.
As given in Table 23, as of September 2015, banks have disbursed new loans of IDR 4.41 trillion to the
fisheries sector (82.09% of target of IDR 5.37 trillion for 2015), while non-bank partners have disbursed
IDR 252 billion (as of October 2015). The break-up of this data across the provinces is not available. PT.
Jamkrindo acts as the loan guarantor for this has committed loan guarantee for the sector in amount of IDR
81.96 billion national wide.
Issues in Implementation of the JARING


Limited socialisation either from government or from bank/non-bank partners to the fishermen/
fishermen associations. Some fishermen in several fishery areas did not know this programme and how
to apply the loan27.
Banks still consider fisheries as a risky sector since the revenue is unstable and is dependent on weather.
24http://bisniskeuangan.kompas.com/read/2015/11/13/124500726/Genjot.Pembiayaan.ke.Sektor.Perikanan.dan.Kelautan.Program
.Jaring.OJK.Digelar.di.Malang
25 http://www.ojk.go.id/id/kanal/perbankan/berita-dan-kegiatan/siaran-pers/Pages/Siaran-Pers-OJK-Perbankan-dan-IKNBPerluas-Program-JARING.aspx
26 http://www.ojk.go.id/id/berita-dan-kegiatan/publikasi/Documents/Pages/Sambutan-Ketua-Dewan-Komisioner-Otoritas-JasaKeuangan-Kick-Off-Program-JARING-OJK/Pointers_sambutan_KetuaOJK_Jaring_1431408283.pdf
27 http://www.sindotrijaya.com/news/detail/10488/tantangan-bayangi-program-jaring-ojk#.VsQkv4TBZ-U
20

In addition, many banks are not present in remote fishing communities, which are the main target for
this programme.
4.4 Note on Loan Guarantee Firm
The two major credit guarantee companies in Indonesia are Jamkrindo and Askrindo, both are state-owned.
There are also 14 province-level guarantor companies (Jamkrida) owned by the provincial governments of
East and West Java, Bali, Riau, NTB, West and South Sumatra, South, Central and East Kalimantan,
Banten, Bangka Belitung, NTT and Papua. We have detailed the typical credit guarantee product offered
by Jamkrindo for micro loans and KUR (Refer Table 24) as these are relevant for SAFIRA.
Table 24: Loan Guarantee Product Features for Microloans and KUR
Product
General/Micro Loan Guarantee
KUR Guarantee
Features
Purpose
Guarantee Size
To guarantee the loans disbursed by
microfinance institutions like banks
(micro banking
units/BPRs/cooperatives/venture
capital companies)
Maximum 80% of the loan size
Guarantee fee
0.5% - 2% p.a. of the loan size,
paid by the debtor
Guarantee
duration
Claims process
As per the loan term
Other condition
General loan: Case by case
Micro loan: Conditional Automatic
manner (if the loan falls to
collectability 4 and 5 it will be
automatically settled)
Assessment of loan feasibility is
bank’s responsibility; guarantor relies
on manual data provided by the
financial institutions (since SIKP is
not available for co-operatives and
majority of BPRs)
To guarantee KUR loans as per the
government’s regulation
- 70% (for agriculture, fisheries and
processing industry)
- 80% (other sectors)
3% p.a.28, (reviewed by Minister of Finance
every six months)
paid by government to the guarantor
company using reimbursement scheme
As per the loan term
Conditional automatic manner (if the loan
falls to collectability 4 and 5 the loan
amount will be settled)
Assessment of loan feasibility is bank’s
responsibility; guarantor checks the
applicant via SIKP (loan system provided
by government) input by the bank
Performance of loan underwriting
The target and achievement of Jamkrindo is given in Table 25. This data is not available for Askrindo or
regional Jamkrida.
FY
2014
Table 25: Target and Achievement for Loan Guarantees for Jamkrindo
Jamkrindo
Target
Realisation
IDR 60.92 trillion of loan
New underwriting for 7.8 million of
underwriting29
MSME/cooperatives, IDR 40.74 trillion
(66.87% target) 30
http://www.sjdih.depkeu.go.id/fulltext/2015/105~PMK.05~2015Per.pdf
http://www.jamkrindo.com/dload/website/annual-report-2015-jamkrindo.pdf
30 http://www.jamkrindo.com/dload/website/annual-report-2015-jamkrindo.pdf
28
29
21
2015
2016
IDR 77 trillion of new loan
underwriting, including
IDR 1o trillion in maritime sector
56.63% of KUR disbursed31
IDR 115 trillion of new loan
underwriting, including
IDR 5o trillion in KUR33
IDR 73.3 trillion (>95% target) incl. IDR
10.3 million KUR32
N/A
As of November 2015, all the guarantor companies (excluding Askrindo) had underwritten loans worth IDR
97.64 trillion for both productive and un-productive loans34.
The selection of the guarantor company is left to the executor banks and in practice, most of the banks
partner with multiple guarantors for the same product.
Issues faced by Loan Guarantee Companies


With the increasing KUR target in 2016 to IDR 103 trillion, Jamkrindo and Askrindo and other small
local guarantor company face challenges in raising capital and still wait for government intervention.
Limited capacity to tap all MSME players in term of human resources and outreach. Currently
Jamkrindo and Askrindo are located in capital cities of each province only. So their outreach to more
remote regions is an issue.
5.0 Agriculture Finance Models Involving Value Chain Companies in Indonesia
A number of Value Chain players have conducted a series of pilots in trying out different value chain
financing models in Indonesia. We have explained in detail some of these programmes in this section.
5.1 Syngenta/Mercy Corps/ Bank Andara Agri-finance project for Maize farmers
Mercy Corps Indonesia (MCI) has an integrated value chain project in NTB and East Java. Under this
programme MCI has partnered with Syngenta Corporation to introduce an advanced system of maize
farming to improve the productivity by 20%. MCI has identified a local BPR, Bank Pesisir Akbar, through
Bank Andara as the executing financial institution for this project. Bank Andara provides loan capital to the
BPR which in turn finances the maize farmers. The loan product given to the farmers is a customised loan
product designed by MCI for Bank Pesisr Akbar. Part of the loan is given in the form of agriculture inputs
like seeds, fertilisers and pesticides and the remaining is given in cash to pay for labour. The product offered
in this programme is explained in Table 26 while the mechanism is graphed in Figure 3.
Table 26: Maize famer Loan Product- Bank Andara/Syngenta/ BPR Pesisir Akbar
Product Features
Product Details
Loan Purpose
Working capital loans for maize farmers
Loan Size
IDR 8 million per hectare
IDR 5 million in Kind (in the form of inputs- seeds, fertilisers) and IDR 3
million in cash (for labour)
Interest rate
1.8% flat per month
Loan Term
6 months during first cycle
will be increased to 8 months for second cycle
Repayment
Seasonal loan and entire principle and interest is paid at the time of harvest.
Frequency/conditions
http://bumn.go.id/jamkrindo/berita/136/Jamkrindo,.Asa.Baru.Pengrajin.Tahu
http://keuangan.kontan.co.id/news/realisasi-penjaminan-jamkrindo-di-2015-rp-733-t
33 http://keuangan.kontan.co.id/news/realisasi-penjaminan-jamkrindo-di-2015-rp-733-t
34 http://www.ojk.go.id/id/kanal/iknb/data-dan-statistik/lembaga-keuangan-khusus/Documents/Pages/Ikhtisar-Data-KeuanganLembaga-Penjaminan-Periode-Januari---November2015/14%20Ikhtisar%20Data%20Keuangan%20Lembaga%20Penjaminan%20Periode%20Januari-November%202015.pdf
31
32
Collateral Requirements
Role of VC players
Other conditions
22
In some areas the amount is recovered through the agriculture traders to
whom farmers sell the produce. But this is not applied in all regions and in
some cases the loans are collected through bank staff
Flexible arrangement. One or two land certificates given as collateral for the
entire group of farmers
Syngenta provides the inputs for the in-kind part of the loan. BPR partners
with local agriculture traders who purchase the crop and the loans is
deducted from the local traders directly.
The loan product has a crop insurance component. The premium is IDR
100,000 per hectare. Farmers need not repay the loan, if there is
destruction of more than 75% of the crop due to drought or tornadoes.
Figure 3: Collaboration among Bank Andara, MCI and BPR Pesisir Akbar
Source: Adapted from product booklet of BPR Pesisir Akbar
The product has been quite successful in the pilot phase with 198 farmers given loans worth and a total of
385 hectares covered. This programme will be continued in 2016 with a target to reach 669 farmers.
5.2 POWER (Promoting Organisations That Work to Empower Rice Farmers) by
POWER is a three years project funded by John Deere Foundation and executed by MCI. It targets producer
co-operatives of smallholder rice farmers in three districts (Subang - West Java, Banyuwangi - East Java,
and Lombok - NTB). The objective of the project is to increase farmer's incomes through project
interventions that will build the capacity of farmer groups, improve small holder farmers' access to financial
services and document lessons learned and good practices for replication throughout Indonesia.
The model replicates the earlier model with corn-farmers and in this project there are two Seed companies
(BASF in East Java and Syngenta in NTB). As of now, four (4) BPRs have been nominated; three (3) in
Lombok and one (1) in East Java. Detail of mechanism is shown in Figure 4.
23
The project’s objective is to support 20,000 rice farmers and increase their income to 28% in March 2018.
The programme targets on reaching rice smallholders who own up to two hectares of land. The core focus
of the programme is to support KUD (primary producer co-operatives) of rice farmers and strengthen them
by giving technical assistance and access to finance.
Table 27: Project Details of POWER Programme of MCI
Tentative Product Details ( These features are being finalised)
Working capital loans for paddy farmers
Approx. IDR 5 – 6 million. Part of the loan will be in kind (agriculture
inputs) and part of it will be in cash
Interest rate
The interest rates will be as per the individual MFI/BPR
Loan Term
Depending on the crop cycle
Repayment
Seasonal loan and entire principle and interest is paid at the time of
harvest.
Collateral Requirements One land certificate for the entire group of farmers
Role of VC players
BASF will provide the inputs for the in-kind part of the loan. MCI will work
through the KUD in this project and the loans will be routed through the
KUD.
Other conditions
MCI is in talks with Syngenta foundation to develop an index based
insurance for the farmers under the Power project.
Product Features
Loan Purpose
Loan Size
Figure 4: Mechanism of POWER
Source: Based on MicroSave interviews with MCI
5.3 Monsanto, Bank BRI and Cargill Model for Maize Farmers
In Mojokerto, East Java, Monsanto and Cargill have come together to offer an integrated value chain model
for maize farmers. Under this project Monsanto provides seeds and gives technical assistance to farmers on
best practices for maize production while Cargill will purchase the final produce and also trains the farmers
on post-harvest practices and packing etc. BRI gives loans to the farmers for purchase of the seeds and other
inputs through Monsanto’s distributors.
24
Figure 5: Monsanto- BRI- Cargill Corn Business Model
Source: PIS Agro
The pilot was considered successful by all the parties involved and it covered 100 farmers and 50 hectares.
This will be scaled up to 1600 hectares in East and Central Java in 2016.The loan product details is
explained in Table 28.
Table 28: BRI Loan Product for Monsanto and Cargill Partnership Programme
Product Features
Loan Purpose
Loan Size
Interest rate
Repayment
Role of VC players
Other conditions
Details
Loans for purchasing inputs for corn farmers through farmer groups
IDR 7 million per hectare
9% p.a.
Loan repayment through Cargill which purchases the end crop
Land certificate of the farmer members (mostly as a psychological
collateral)
Monsanto provides the seeds through distributors and Cargill purchases
the crop through the farmers groups and pays directly to BRI
Monsanto and Cargill provide trainings to farmers groups on the best
practices of crop production and post-harvest practices respectively. The
loan is given through farmer groups only
5.4 Loan Guarantee model of PTPN X for Sugarcane Farmers
PT. Perkebunan Nusantara (PTPN) X is a state owned agro-industrial company which owns 11 Sugar mills
in East Java which serve around 15,000 sugarcane farmers. Bank BNI uses the services of PTPN X to
distribute the loans to sugarcane farmers. PTPN X distributes the PKBL loan to sugarcane farmers through
the sugar mills owned by it.
Till 2015, PKBL loans would be given to the Sugar mill first and the sugar mill will give the loans to the
farmers. In this case, PTPN X would guarantee the loan given to the sugar mill and the sugar mill will in
turn guarantee the loan given to the member farmers. But under the new guidelines in 2016, PTPN X nor
the sugar mill will act as the guarantor but in turn the loan will be directly given to the farmer by the bank.
The sugar mill will just provide the list of farmers and the track record of the farmer for the banks.
25
The earlier model of acting as a guarantor was not considered suitable for PTPN X because they do not have
the resources or the capability to understand the credit risk of farmer members. The loan product details
for PKBL are shown in Table 29.
Table 29: Loan Product Details of PKBL Product of PTPN X
Product Features
Details
Loan Purpose
Loans for plantation of Sugarcane
Loan Size
The loan size is roughly IDR 25 million per hectare for Sugar cane farmer
Interest rate
6 % p.a.
Repayment
The loan repayment is done through the sugar mills and is deducted from
the sugar payments. The sugar mills and PTPN X are liable for the default
by the farmers
Land certificate of the farmer members
Role of VC players
PTPN X earlier used to play the role of guarantor for the loans given
through them to the sugar mills and the sugar mills play guarantor to the
loans given to the farmers. But currently, PTPN X just provides list of
sugarcane farmers and their track record of sugarcane production and the
bank directly lends to the farmers.
Other conditions
The farmers need to have a good track record with the sugar mills and they
have to be recommended by PTPN X to receive the loan
Figure 6: Current Collaboration of PTPN and Sugar Mills for PKBL Distribution
5.5 BRI partnership with PT. Wonokoyo
PT. Wonokoyo is a poultry company based in Surabaya. It has a model of working with local farmers
wherein Day old Chicks (DOCs) are given to the farmers who grow these chickens and sell these chickens
back to the company. The producer farmers need working capital and investment capital to run the business
of nurturing the chickens.
26
In 2016, BRI has partnered with PT. Wonokoyo to provide loans to the poultry farmers who are partners of
the company. BRI gives the loans as part of the KUR programme. PT. Wonokoyo only provides the list of
the farmers and their track record in terms of the production and sales to PT. Wonokoyo based on which
BRI will provide the loan amount. The decision of the loan and the responsibility of the loan is entirely with
BRI and PT. Wonokoyo does not guarantee the loan. The scheme is depicted in Figure 7.
Table 30: Product Features of BRI-Wonokoyo Partnership
Product Features
Loan Purpose
Loan Size
Interest rate
Loan Term
Repayment
Role of VC players
Other conditions
Working capital loans for poultry farmers who are partners of PT.
Wonokoyo
The loan is BRI KUR product (See product details in KUR Section)
PT. Wonokoyo provides the list of the farmers to BRI. BRI does the
due-diligence and takes decision on loan
The poultry farmers need to have a good track record with PT
Wonokoyo and they have to be recommended by the company to
receive the loan
Figure 7: BRI - Wonokoyo Partnership Model
27
Bank Mandiri has tried a similar model in Central Java. It has partnered with PT. Surya (makers of Gudang
Garam brand of Cigarettes) and gives loans to the tobacco farmers. PT. Surya uses a number of middle men
(small traders) who facilitate the purchase of tobacco on behalf of the company. These middle men have
long term relationship with the farmers and Bank Mandiri takes the recommendation of these middle men
for giving the loan. It also follows up with the middle men in case of default (though there is no legal
guarantee of the loan from the trader it acts as a social pressure). The loan product offered is the KUR micro
product similar to the BRI product mentioned earlier.
Figure 8: Bank Mandiri- Gudang Garam Tobacco Farmers Financing
A similar model to the above has been tried out in the dairy sector. With Banks using KUDs (Koperasi Unti
Desa) or primary producer co-operatives, like KUD SAE Pujon, which have large membership (in excess of
100,000 members) and give loans for purchase of cattle to the members with good track record. The
repayments for these loans are done directly through the KUD by deducting from the milk sales. This
minuses the risk of the loan.
5.6 IFC Agri-finance project with Bank Danamon
IFC Indonesia has 2 teams which work on improving agriculture and agriculture finance. The agri-business
team works with independent small holder palm oil farmers in North Sumatra. Other projects of this team
include training of farmer groups and linking them up with value chain players in commodities like Cocoa,
Palm oil and Kopra (dried coconut). The access to finance team works on improving the access to finance
for small holders.
Under this project, IFC has partnered with Bank Danamon and piloted an agri-finance product in Malang
and Blitar districts of East Java. The product was aimed at dairy and poultry farmers. IFC gave technical
assistance to Bank Danamon on market research, designing product and pilot testing of the product. The
loan product details are highlighted in the table below. The bank provides loans to the farmers through the
farmer groups which have existing marketing relationship to a VC player. The pilot was launched in 2015
and by the end of the pilot 67 loans worth USD 450,000 were disbursed. IFC is in talks to partner with Bank
Muamalat to replicate this project.
28
Figure 9: IFC- Bank Danamon Partnership Model
6.0 Note on Agriculture finance by Corporates and SMEs
In addition to banks, value chain firms either input companies or the food processing firms which purchase
the produce do provide finance within their respected value chains to improve the financial status. Some of
the prominent instances of such finance include:
Poultry firms working capital finance to poultry farmers
All the poultry companies in Indonesia (like Pt. Japfa, Charoen Pokhphand) have dedicated in-house farmer
members and they have entered into exclusive arrangements for purchase of poultry. To these members,
the companies provide working capital financing either in direct cash or in kind (in the form of the day old
chicks and other inputs like medicines etc.). Generally, there is no interest involved in such arrangement
but the cost of the loan amount is deducted from the purchase of the produce and the balance is paid to the
farmers. Pt. Japfa has more than 1000 poultry farmers all over Indonesia with whom they have such an
arrangement. But some smaller poultry companies like PT. Wonokoyo have slowly scaled down their role
in financing since they feel it is risky for them .They prefer linking their farmers with commercial banks or
other financial institutions so that their liquidity does not get affected. Also the risk of failure of the business
of the farmer does not affect them.
SME financing in the Dairy Industry
Nestle Indonesia purchases its products through primary dairy co-operatives called KUDs. Nestle provides
interest free loans to these KUDs to set up dairy infrastructure like chilling plants , temperature controlled
trucks for transporting milk etc. Almost all the KUDs in Indonesia have a loan product to their farmer
members to purchase new cows. This is done to increase the cattle population and thereby improve the milk
production and collection. Some KUDs use their internal funds to finance the member farmers while some
partner with Commercial Banks or BPRs to provide loans.
Financing of Distributors of Agriculture Inputs and Seed breeders
One common practice in Indonesia is distributors buy the agri-inputs (seeds, fertilisers etc.) from agriinput companies on credit which they then sell either to retailers or directly to farmers on some credit
arrangements of either one month or more. Farmers generally purchase the inputs from local retailers on
credit with the condition of selling their produce to these retailers at the end of the seasons. The retailers
29
also act as agriculture traders. The distributors and traders generally depend on loans from financial
institutions (mostly commercial banks and BPRs) for meeting their working capital requirements.
In seed production, agriculture input companies have arrangements with seed breeders wherein they
provide the seeds to the breeders farmers on credit and buy back the produce and pay the seed breeders
after cutting the cost of the seeds.
7.0 Recommendations for SAFIRA
The recommendations for SAFIRA based on the supply side study have been divided into the following
categories:
1.
2.
3.
4.
Potential for collaboration with SAFIRA
Models which can be tried out for SAFIRA
Technical Assistance needs of FIs
Other Support crucial for FIs
7.1 Potential Collaborations for SAFIRA Programme
Partner FI selection must be made considering the following criteria:
1.
2.
3.
4.
5.
Commitment to agriculture from Senior Management
Ability to reach scale (at least 1000 farmers as a minimum)
Financial, Operational and Governance aspects of the FI are sound and healthy
FI has the required funds and liquidity to lend for agriculture
Existing infrastructure is suitable for agriculture lending (like presence in rural and agriculture
regions, existing customer base of farmers etc.)
OJK regulates and supervises all commercial banks and BPRs and hence the financial, operational and
governance quality of these institutions is assured. For commercial banks, the senior management
commitment is the key criteria while in selecting BPRs, SAFIRA must analyse the existing infrastructure,
scale and potential outreach that BPRs can achieve and liquidity position of the BPRs to lend for agriculture
needs to be considered.
Credit Unions and Co-operatives are poorly regulated and hence the quality of these institutions greatly
varies. The financial, operational and governance aspects of these institutions needs to be analysed before
entering into any partnership to ensure long term success of the programme. As with BPRs many cooperatives and credit unions are small with very small outreach. We feel any organisation selected (whether
BPR, Credit union or Co-operative) must have an existing or potential outreach of 1000 farmers as clients.
The focus of this study was not on assessing the financial institutions but rather on identifying the major
institutions with agriculture focus. Nevertheless, based on our interviews with these organisations and
market intelligence gathered from secondary sources we have identified some potential candidates for
SAFIRA to partner in the selected provinces. It is recommended that SAFIRA conduct a more thorough due
diligence on the above aspects before making a final decision on partner selection.
Potential Partners in East Java
In East Java the most promising financial institutions as per our study include: Bank BRI, Bank Jatim, BPR
Jatim, BPR ADY Banyuwangi, BPR Arta Kencana, BPR Pujon, BPR Nusuma Jatim and CU Sawiran. All
these institutions have a clear focus on agriculture with existing programmes. BRI and Bank Jatim have a
large focus on the agriculture sector due to the KUR, JARING and other government programme. Bank
Syariah Mandiri among the sharia commercial banks is the most active in agriculture and it can be another
potential partner for SAFIRA in East java where it is active. BPR Jatim is the biggest BPR in East Java which
works in all the districts and has the required outreach and commitment towards agriculture. It is owned
30
by the provincial government and has a mandate to lend more into agriculture. Among Credit Unions, CU
Sawiran is the biggest credit union in East Java and it has a clear focus on farmers.
In terms of VC players, Monsanto, Syngenta and Cargill have projects to finance maize farmers in East Java
and these can be potential partners for SAFIRA too. Similarly, PT. Wonokoyo is a poultry company which
is open for financing its poultry farmers. KUD’s are the most important players in the dairy value chain and
SAFIRA can look to partner with a number of KUDs like SAE Pujon, KUD Batu, KUD Pasuruan etc.
Potential Partners in NTB
In NTB, the potential financial institutions are BPR Pesisir Akbar, PD BPR NTB Dompu, PD BPR NTB
Sumbawa, KSP Lombok Sejati and BPR Samawa Kencana are the most promising institutions. Bank NTB
is also a potential partner but the current President Director does not have the focus on agriculture. In terms
of value chains, Syngenta and EWINDO have existing projects in NTB.
Potential Partners in NTT
Bank NTT, CU Obor Mas and CU Pintu Air are the most promising institutions in NTT. Bank NTT especially
has a strong focus on agriculture while in the case of CU Obor Mas and CU Pintu Air most of the members
of these credit unions are farmers so they can be used to reach out to a large farmer segment. EWINDO
seeds has a good presence in NTT and it also have a large CSR programme in NTT to conduct trainings to
farmers.
Potential Partners in Papua
Commercial Banks like BRI, Bank Mandiri and Bank Papua (BPD) are the major financial institutions
operating in Papua. There is only one BPR present and there are no strong credit unions or co-operatives
which are present in Papua as per the stakeholder interviews that we conducted. SAFIRA can focus initially
only on the commercial banks to partner in Papua.
7.2 Models recommended for SAFIRA
Partnering with input suppliers, product off-takers combined with weather/ crop insurance product
The MCI/Syngenta model in NTB is one of the successful models in Agri-finance in Indonesia. As explained
earlier, key highlights of this model are: to offer loans in kind instead of giving the loans in cash and
combining the loan with a crop or weather insurance product and partnering with the agriculture traders
who buy the produce and ensure loan recovery through them. This model has the advantage of minimising
the risk of the FI by ensuring proper utilisation of the loan and to mitigate the risk of weather on the loan
amount. This model will be the most suitable for BPRs and Credit unions which perceive that agriculture
finance is risky.
Targeting farmers in existing partnership with a VC player
Many VC companies like Cargill, Nestle, and PT. Wonokoyo have supply chains of farmer networks. These
VC players have a long standing relationship with many of the famer producers. SAFIRA can actively target
the producer farmers of these VC players for financing. This model will be preferable to all the state owned
Commercial banks. Big commercial banks have the capacity to target larger scale of farmers which these
big value chain firms have. Smaller BPRs and CUs may not be able to meet all the demands of all the farmer
networks of the big VC companies unless there is a network of BPRs covering a large geographical area. The
role of VC players in this arrangement must be limited to identifying the list of farmer producers and the
due-diligence and the credit risk for the loan must remain with the financial institution. VC players are not
comfortable in providing loan guarantees or share the risk of the loan default as they do not have the
capacity to undertake such exercises.
Credit Risk Sharing Arrangements
Credit risk sharing arrangements with the VC players is a possibility but it will depend on the type of sector
and the company. If the input company wants to promote a new technology or system they may be willing
31
to share some of the burden of the risk in giving credit for the application of those technologies. But some
VC players may not want to invest in credit sharing arrangements
7.3 Technical Assistance needs of FIs
Commercial Banks
For commercial banks, the two major deficiencies in agriculture lending is to develop customised
agriculture products depending on the needs of specific value chains. Most of the banks are offering generic
products and in most cases using the KUR product (which is standard for all purposes). The other reason
why banks are reluctant to lend directly to farmers is the low capabilities in monitoring agriculture loans.
SAFIRA can provide capacity building on these two aspects to lenders.
The major requirement for the commercial banks is to link up banks with VC players to ensure they target
farmers which have assured markets and they can analyse the past performance of the famer/producer to
make an informed decision on the loan. Product refinement is one technical assistance which SAFIRA can
target for the commercial banks since the products of commercial banks are very generic and they need to
be suited as per the needs of the particular commodity producer.
BPRs and Co-operatives
BPRs and co-operatives require more intense technical assistance needs from SAFIRA to improve internal
capacities. The areas of capacity improvement include: Product development for Agri-finance, credit
analysis and risk management practices to manage an Agri-finance product, liquidity management (to
handle balloon payment products). These institutions will require more handholding in conducting pilots
and SAFIRA will have to design a clear technical assistance plan for each partner organisation to ensure
success of the proposed intervention.
Value Chain Players
As per Monsanto, to scale up their model in 2016 they feel the need for technical assistance for each of the
partner involved (Monsanto, BRI and Cargill). Monsanto expects technical assistance in developing
detailed SOP’s for all the players involved which will clearly define the role for each player. Monsanto also
expects product development for BRI, since BRIs existing KUR product is a regular monthly repayment
product and not a seasonal product. For the farmer groups, providing TA on production practices and postharvest practices. This will help Cargill to procure more quality product and they can pay more rate to the
farmers.
7.4 Other Support Required
Specialised Capital for Agriculture lending
One of the reasons BPRs and Co-operatives do not focus too much on agriculture is due to lack of liquidity
to offer a seasonal product. These institutions need financial support in the form of specialised loan capital
with terms aligned with the agriculture loan terms at reasonable interest rate. SAFIRA can explore options
of linking partner BPRs with wholesale lenders like Bank Andara, Rabobank foundation or big commercial
banks.
Loan Guarantee to minimise risk perception
Perceived risk of agriculture is another major challenge to nudge banks and FIs to lend in this sector.
SAFIRA can explore options of providing loan guarantees or risk sharing of the proposed agriculture loan
either through itself or by involving loan guarantee companies like Jamkrindo or Askrindo and bear the
cost of the guarantee.
32
ANNEXURE I: Additional Government Programmes in Agriculture financing
Kredit Ketahanan Pangan dan Energi (KKPE/Food and Energy Security Credit)
KKPE is a subsidised loan programme for providing investment and/or working capital to farmer
groups/producer co-operatives. The government appointed 22 Banks, 8 commercial banks and 14
provincial-government owned banks (BPDs) for the delivery of this programme.
KKPE Loan model




Farmer submit individual budget plan to farmer group. Farmer group compiles the budget from all
members, result in RDKK (Rencana Definitif Kebutuhan Kelompok/Group Budget Plan).
Farmer group submit RDKK to field staff (of Cooperative Bureau under Ministry of Cooperative) for
approval
Approved RDKK is submitted to executor banks for loan assessment. Upon client’s feasibility, the
bank will make loan agreement and disburse the loan to the group head or to individual farmer.
Individual farmers pay instalments as per the agreement directly to the bank.
Product
Features
Loan Purpose
Target Sector
Operational
Areas
Loan Size
Table 31: Product Features of KKPE
Details
Working capital and investment for farmer, distributed via farmer group/
cooperatives
 Rice, corn, soybeans, sweet potatoes, sugar cane, cassava, peanuts, sorghum.
 Horticulture (chili, onion, ginger, potatoes and bananas), provision of food
(rice, corn, soybeans).
 Breeding beef cattle, dairy cows, breeding cattle, chicken laying, broiler, freerange chicken, duck and quail.
 Fishing, Aquaculture Shrimp, tilapia, carp, catfish, catfish, tiger grouper,
Goldfish and sea weed cultivation.
 Procurement/renewal of equipment, machinery, and other tools to support the
above activities.
Sumatera Utara, Sumatera Barat, Sumatera Selatan, JavaBarat, JavaTengah, D.I.
Yogyakarta, JavaTimur, Bali, Sulawesi Selatan, Kalimantan Selatan, Papua, Riau,
Nusa Tenggara Barat and Jambi.
- Max IDR 50 million: for farmers, ranchers, growers, fishermen and fish farmers
- Max IDR 500 million: for cooperatives in order to procure food (rice, corn, and
soybeans) and for farmers' groups in order to procure/rejuvenation equipment,
machinery, etc.
Interest rate
KKPE
KKPE for Sugarcane
KKPE for Non Sugarcane:
Animal Husbandry
Non Husbandry (Food and
Horticulture Crops)
Interest Rate (% p.a.)
Bank’s
Charged to
Government
charge
Clients
Subsidy
LPS + 5%
7.00
LPS – 2%
LPS + 6%
LPS + 6%
6.00
6.00
LPS
LPS
Farmers do not pay loan provision and administration
Loan Term
Repayment
Frequency
Collateral
Requirements
- Up to 5 years
- Per six month (interest and principal)
- The financed business assets (area, crop, harvest) proven by certificate of
ownership
33
Executor Bank
- Other fixed assets (land is preferable) as additional collateral (mandatory), with
certificate of ownership
- Guaranteed by guarantor company – if any
BRI, BNI, Bank Mandiri, Bank Bukopin, Bank Agroniaga, BII, Bank CIMB Niaga,
Bank Artha Graha, Bank Mega, BPD Sumut, BPD Sumbar, BPD Sumsel, BPD Aceh,
BPD Kaltim, BPD Papua, BPD Riau
As per Ministry of Agriculture, KKP‐E disbursement in 2014 was IDR 1.734 trillion which was 86.7% of the
target IDR 2 trillion35. Government set target for KKPE in each province and Table 37 shows the target in
SAFIRA operation areas. The target achievement for KKPE for the year 2015 is not yet available. KKPE
product has been stopped from January 2016 and is under review by the government.
Table 32: Target for KKPE, 2015
Province
Target in 201536
(IDR million)
JavaTimur
2,306,980
NTB
138,467
NTT
58,795
Papua
162,270
INDONESIA
8,454,342
Kredit Pengembangan Energi Nabati & Revitalisasi Perkebunan (KPENRP/Credit for Bio-Energy Development and Plantation Revitalisation)
KPEN-RP is an Investment Credit granted by Executor Banks to farmers at subsidised interest to promote
Biofuel Raw Material Development Program and the Revitalisation of Plantation.
Product
Features
Loan Purpose
Crop to be
financed
Operational areas
Loan Size
Interest rate
Table 33: Product Features of KPEN- RP
Details
Investment (for expansion, rehabilitation and renewal)
Palm oil, cacao and rubber
North Sumatera, West Sumatera, Riau, Jambi, Bengkulu, South Sumatera, Bangka
and Belitung, Lampung, West Java, West Kalimantan, Central Kalimantan, South
Kalimantan, East Kalimantan, North Sulawesi, Central Sulawesi, West Sulawesi,
South Sulawesi, South East Sulawesi, Maluku, Papua, West Papua
Depend on bank’s assessment, based on total project cost + IDC + certification fee
Interest during grace period: subsidised by government: LPS (Base lending rate
offered by the Deposit Insurance Agency)
Interest rate (p.a.)
Charged to Clients
Government Subsidy
LPS + 5%
Loan Term
35
36
7%
LPS + 2%
Interest after grace period: commercial as per the bank’s policy
 Palm oil and Cacao: maximum 13 years with grace period 5 years
 Rubber: maximum 15 years, grace period 7 years
http://psp.pertanian.go.id/assets/file/2015/LAP%20KINERJA%20DIT.%20PEMBIAYAAN%20TA.%202014.pdf
Petunjuk Teknis KKPE 2015 issued by Ministry of Agriculture
Repayment
Frequency/
Conditions
Collateral
Requirements
Executor Bank
Other conditions
34
 No instalment payment during the grace period
 Monthly instalment after grace period
 The financed business assets (area, crop, harvest) proven by certificate of
ownership
 Other assets as additional collateral (not mandatory, depend on the executor
bank’s internal policy)
 guaranteed by guarantor company – if any
BRI, BNI, Bank Mandiri, Bank Bukopin, Bank Agroniaga, BII, Bank CIMB Niaga,
Bank Artha Graha, Bank Mega, BPD Sumut, BPD Sumbar, BPD Sumsel, BPD Aceh,
BPD Kaltim, BPD Papua, BPD Riau
Maximum area owned by the client: 4 Ha
In 2013, this programme was targeted to disburse IDR 38.6 billion and recorded to disburse loan IDR 2.89
billion out of IDR 7.49 billion committed (loan agreement signed) 37. This programme has been stopped in
January 2015 and is under review by the government.
Kredit Usaha Pembibitan Sapi (KUPS/Cattle Breeding Credit)
KUPS is special loan product to promote Cattle breeding. The target business is rearing of calves for beef
and dairy cows.
Product
Features
Loan Purpose
Business financed
Operational areas
Loan Size
Interest rate
Loan Term
Repayment
Frequency/
Conditions
Collateral
Requirements
Executor Bank
Table 34: Product Features of KUPS
Details
Investment for cattle/dairy farmer
Breeding for cattle or dairy cows that equipped with microchips for identification
number
East Java, West of Nusa Tenggara, DI Yogyakarta, Central Java
Maximum = IDR 66.3 million per businesses (nursery company, cooperative,
group/joint groups of farmers).
LPS + 6% p.a.
Farmer: 5%, remaining: government subsidy
No provision charge
Maximum 6 years with up to 24 months grace period
During grace period: no instalment payment
Monthly instalment: monthly instalment
- The cattle financed, provided with microchips for identification
- Land with certificate of ownership
BRI, BNI, Bank Bukopin, Bank Jatim, Bank Jateng, BPD DIY, Bank Nagari, and
Bank Bali
Target and Achievement
In 2013, IDR 590 billion was disbursed under this programme which was 14.75% of the annual target IDR
4 trillion38. In 2014, the government set target of IDR 20 trillion (for 200,000 cattle). However, in January
2015 this scheme was stopped by government due to low uptake of the product and banks are managing
existing loans.
37
38
http://psp.pertanian.go.id/index.php/page/publikasi/111
http://psp.pertanian.go.id/index.php/page/publikasi/111
35
36
ANNEXURE II: List of Interviews/Contacts
East Java
No.
1.
City
Surabaya
2.
Financial Institution Name
Contact Person Name
BNI Regional JavaTimur
Mrs. Andhina Budianie – Head of Business Banking
BPR Jatim Bank UMKM JavaTimur
Mr. Heru – In Charge for KUR and Ex Branch
Manager of Malang Branch Office
Mr. Bambang Rushadi – Marketing Director
Mr. Priyo – Farm Division Head and
Mr. Farindra – Farm Sub Division Head
3.
Banyuwangi
CU Sang Timur
Mr. Gian – Manager
4.
5.
Malang
BPR ADY
BPR Pujon Jayamakmur
Mrs. Rita – Operational Director
Mr. Rudy Widjaja – President Director
CU Sawiran
Koperasi BPR Arta Kencana
BPR Ekadharma
Mr. Aang Sardjita – President Director
Mr. Hari Wuryanto – President Director
Mrs. Tutut – Director
Mrs. Diah – Division Head of Operational
6.
7.
8.
No.
1.
2.
Madiun
City
Surabaya
Value Chain Player Name
Contact Person Name
PT. Perkebunan Nusantara X
Mr. Iwan Mahendra – Kepala Urusan Keuangan
PKBL (PKBL Finance Related Head)
PT. Wonokoyo Jaya Corporindo
Mr. Agus Basuki – Kepala Divisi Akuntasi
(Accounting Division Head)
Contact Person
Phone Number
0816-5366-37
0812-3019-006
081 5510 3456
031 – 5677844/
0815-5322-0060
0853-3626-7428/
0812-5230-9135
0811-3559-64
0812-5232-389,
0341-524090
0812-3364-328
0812-341 9-064
0812-5210-948
0815-5632-001
Contact Person
Phone Number
0813-5782-3999,
(031) 3523143 – 147
(hunting)
08123-1425-20,
031-295600 Ext.
1728
37
West Nusa Tenggara (NTB)
No.
1.
2.
3.
4.
5.
6.
7.
8
City
Mataram
Bima
9.
PT. Bank NTB
BPR Wiranadi
KSP Lombok Sejati
Mr. H. Komari Subakir – President Director
Mr. Surtopilahili – President Director
Mr. H. Suparjito – President Director
Mr. Siswantio – Division Head of Funding
BPR Primanadi
BPR Syariah Dinar Asri
PD BPR Lombok Tengah
PT. BPR Tresna Niaga
PD BPR NTB Bima
Mr. Ivan Eroka Yuliadji – Marketing Director
Mr. Mustain – Division Head of Loan
Mr. Ahmad Afif – President Director
Mr. Hary Arfandy – President Director
Mr. Lukman – President Director
Mr. Madon – Director
Mr. Hamid –Head of Credit
Mr. H. Zas’ari H. Zainuddin, SE – President
Director
Mr. Jufrin – President Director
Mrs. Irma Suryani – Director
Mr. Ikhwan – President Director
Mrs. Hj. Ida – Director
Mr. Syam – Director of Reporting and Controlling
PT. BPR Pesisir Akbar
10.
Dompu
PD BPR NTB Dompu
11.
Sumbawa
BPR NTB Sumbawa
12.
Contact Person Name
PT. BPR Samawa Kencana (BSK)
Contact Person Phone
Number
0816-8553-39
0812-3751-888
0817 5703 794
0878-6526-6765 /
0813-3989-3932
0819-3315-8089
0819-1845-3096
0818-3668-24
0878-6585-3666
0813-5341-8237
Xx
0823-4003-0933
0812-3701-006
0819-1723-8850
0878-6672-0555
0812-3948-0444
Xx
0372 – 9291718
Jakarta
No.
1.
City
Jakarta
2.
PT. Nusantara Artha Bina as the holding
company of BPR Bank Nusuma Jatim
PT. Bank Mandiri (Persero) Tbk.
3.
Rabobank Foundation
Contact Person Name
Mr. Eky Amrullah – Director
Mr. Bowo Susanto – Control Manager
Mrs. Sartisa – Senior Manager in Micro Banking
Group
Mrs. Ayu – Staff in Micro Banking Group
Mr. Stephen Widjaja
Mrs. Retno D. Jayanti
Number
0818 771 973
0813-2931-9379
0811-1976-01
xx
0815-9734-137
xx
38
No.
1.
2.
3.
4.
City
Jakarta
Value Chain Player Name
Contact Person Name
PT. Ciomas Adisatwa – JAPFA Group
Mr. Andi Ikhwan – Programme Director
Mrs. R. Windhy Herawati – Head of Treasury
Yayasan Bina Tani Sejahtera : subsidiary of
PT. East West Indonesia which handling
CSR
PT. Monsanto Indonesia
Mr. Edwin S. Saragih – Chairman
Mr. F. Firmansyah
Number
0812-9409-424
0813-1893-6260 /
021-2854-5880
0811-9816-64
+62-8111872106,
<[email protected]>
39

Agri-Finance Supply Side Study in Eastern Indonesia - AIP

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