Rabobank Foundation has allocated ¤3.2 million (US$4.6 million) for next year’s program, an increase from the ¤1.3 million it spent this year, reaching out to 14 cooperatives with 90,000 members in Java, Sumatra, Kalimantan, Lombok and Sulawesi, project officer Hartadi Indriadi told a media conference on Wednesday.

The program includes a micro financing scheme, in which cooperatives are given funding of up to ¤500,000 in the forms of loans as well as training in capacity building. Loans have an interest rate of 6 to 7 percent, far below current the commercial rate of up to 17 percent.

“We apply interest so the cooperatives will be commited. We are not taking any profits from this interest; it goes back to fund the micro financing scheme,” he said.

According to the Central Statistics Agency (BPS), small farmers account for 44 percent of the national workforce, or around 46.7 million workers. Most have been finding difficulties in getting loans from commercial banks due to collateral requirements and high interest rates.

This is where the foundation program comes in. “Our micro financing scheme provides funding for cooperatives to disburse loans to their members without collateral requirements,” Hartawan said.
The program focuses on supporting vegetable farmers.

“Vegetable farmers are mostly small time players in the farming industry, with only small pieces of land. They are the disadvantaged ones who find the most difficulty when it comes to accessing financing,” he said.

However, he said, the foundation had also supported other farmers, such as palm oil and coffee farmers.

“But our support is not in the form of increasing their production capacity, but rather in diversification.

The palm oil farmers now seek certification for their products and we give training to them so they’ll meet the requirements to be certified,” he added.

The foundation, Hartawan said, also helped providing access to information about opportunities in the market.

— JP/adh

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