IPB University Lecturer Explained Various Alternatives for Financing Access for Business Financing in Mbay, Nagekeo
IPB University’s Team of Dosen Mengabdi Inovasi from the Faculty of Economics and Management (FEM) provided education regarding access to agricultural financing to farmers in Mbay, Nagekeo Regency, East Nusa Tenggara Province. They are Prof Firdaus, Dr Tanti Novianti, Dr Nia Kurniawati Hidayat and Titin Suhartini, SE.
“Access to financing is financing business capital that can be used to establish or develop a business, either to purchase inventory, equipment or working capital,” said Dr Nia Kurniawati Hidayat.
She added that the purpose of this access to financing is as a reference or recommendation to rice farmers in Mbay regarding various sources of funding for carrying out farming businesses.
“There are several sources of funding, such as using your own capital, using collaborative capital and using loans for farming capital,” she explained.
Dr Nia explained that farmers who use their own capital are generally sole land owners and most of their land is not large.
Meanwhile, for farmers with cooperative capital sources, they usually have larger areas of land or are involved in a government or company sectoral program. They tend to share their profits and losses with other parties. Usually, these farmers will be more disciplined regarding the use of funds as well as their duties and authority.
“Furthermore, there are also those who use loan capital for farming business capital. “This loan can be in the form of Micro Credit Programme (KUR), middlemen, cooperatives, Village-Owned Enterprises (BUMDes), multi-finance or venture capital,” explained Dr Nia.
Regarding KUR, she explained that this program is a working capital or investment financing credit for individual or individual debtors, business entities and/or business groups that are productive and viable, but they do not have additional collateral or the additional collateral is not sufficient.
According to Dr Nia, currently middlemen are still an alternative capital loan for farmers when they lack capital to run their farming business. However, the drawback is that usually farmers are obliged to sell their agricultural products to the relevant middleman at a price determined by the middleman.
Apart from that, she continued, cooperatives are also an alternative source of capital loans because the process is not too complicated.
“BUMDes is one of the recommendations for access to financing. “However, what happened in Mbay, Nagekeo BUMDes is still not very effective as an access to financing,” she added.
Furthermore, multifinance is also an alternative access to agricultural financing in Mbay, Nagekeo. However, Dr Nia revealed that there was not much interest from farmers in this access to financing because they felt that the process of borrowing funds was a little impractical compared to other access to financing such as middlemen or cooperatives.
Apart from presenting the material, the IPB University Dosen Mengabdi Inovasi Team also provided a discussion space for farmers to answer the problems of access to financing they were experiencing. (*/Rz) (IAAS/YMK)
