agriculture english

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AGRICULTURE LENDING

One of Product Diversification and Potential Market

Tenny Yanutriana

Prepared for:Academy Microfinance Development in Asia (AMiDA)

Tuesday, May 24th 2011



AGENDA Indonesia Agriculture Profile

Agriculture Lending Portfolio BSY Agriculture Lending Composition

Farmers’ Earning Key Factors

Agriculture Lending Products

SWOT Analysis

Conclusions



Indonesian Agriculture

Profile 60% of Indonesian population live in rural

areas.

70% of rural population, 21.141.273households live from agriculture.

Most of the farmers grow rice and

horticulture. The rest are in livestock,forestry and fishery.



Agriculture Lending

Portfolio

0 4000 8000

Agriculture/Livestosk/ Forestry/Fishery

Manufacturing

Industry

Trade/Hotel/Restaurant

Financial/Ownership/ Business Services

2009

2008

2007

2006



BSY Agriculture Loans

Portfolio

74,446,696,140104,600,110,88

4113,161,947,60

7

462,955,447,894

594,601,467,704

625,713,667,687

0%

10%

20%30%

40%

50%

60%

70%80%

90%

100%

Des '09 Des '10 Mar '11

Agriculture Sector Loan Portfolio



Farmers’ Earning

Key Factors

Product Quality

Land Area

Farmers’ Experience

Agriculture Loans from FinancialInstitutions



Agriculture Lending

Products1. Lending Term:

Short-Term Lending

Long-Term Lending

2. Lending Borrower:

Individual

Group Lending

3.Purpose Use of Lending::

Working Capital

Investment



Agriculture Process

in General1. Land Preparation

2. Seeding

3. Planting

4. Routine Maintenance

5. Fertilizing

6. Harvesting

7. Post-Harvest




Strength Indonesian agriculture land area is 7.7 million Ha

with good quality soils.

Various products range from fruits and vegetablescan be planted in Indonesia.

The experience as farmers of Indonesianpopulation is proven for hundred of years.

Good characteristic of the farmer workers beinglocals and hard workers.




Weakness Lack of financial access for the working capital or

investment for the agriculture industry.

Lower quality of agriculture products compared toother countries’ in Asia.

Lack use of technology in running the industry andlack of knowledge of farmers to run their land

efficiently and effectively.

Minimum supports from the government in order toincrease the quality of products and access tointernational trading.




Opportunity Huge market for domestic, regional, national and

international market.

Many new land for agriculture conversion.

Many research for enhanced quality product andproduct diversification.

Good opportunity to make chained business fromproduction, distribution and selling the products.




Threat Imported products are ruining the domestic market

which come with better quality.

Uncertain weather and climate affects the harvestof the sensitive agriculture products.

The agriculture technology needed is notaffordable for farmers.

The fluctuation of agriculture products’ prices put

the farmers in worries.



Conclusions Indonesian farmers have the advantage of having

great amount of land area, huge range of products toplant and great experience to manage their land BUTlack of access to agriculture lending.

Indonesian agriculture has the aims to both to fulfilldomestic need and the export need, the opportunityto expand the industry is huge.

As community financial institutions, MFI has to playthe role to serve the majority of Indonesianpopulation who rely themselves in agricultureindustry (both from financial and technical assistanceaspects).



Thank [email protected]

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